Form 941 Doesn't Match the Liability Report
This troubleshooting guide addresses the issue when Form 941 does not match the Liability Report in any version of the Payroll product.
Form 941 does not match the Liability Report.
Products affected: Payroll
Versions affected: Any
Potential causes include:
The FICA or Medicare tax amounts might have been changed on a paycheck. The 941 form (Lines 5a and 5c) calculates FICA and Medicare taxes based on the taxable wages for FICA and Medicare. The Liability Report shows the taxes that were actually taken out. The 941 form calculates the taxes that should have been taken out.
less because the taxable wages are incorrect. The Liability Report could have negative numbers.
If an employee is exempt from FICA and this isn't marked in their Tax tab record, it can cause discrepancies. A deduction in their pay will appear as a negative amount on the Liability Report for FICA and Medicare wages. This reduces the taxable wages on lines 5a and 5c of the 941 form. The Liability Report will show the correct taxes, but the 941 form will show less because the taxable wages are incorrect. This can also result in negative numbers on the Liability Report.
A check was voided after the last Liability Report. Usually, Liability Reports are generated at the end of each month. If a check from a previous month was voided in the current month, the printed Liability Report won't show these changes.
- If the FICA or Medicare tax amounts were edited, contact a accountant or tax advisor on how this should be handled.
- If the employee is FICA exempt, the Liability Report may have negative numbers.
- For checks voided since the Liability Report was last pulled, create a Void Check Report in Payroll Reports, and verify that the check date matches the void date on all checks voided.
- If these solutions do not work, contact Support to run a utility.