How to set up, track and pay for child support garnish in QuickBooks seems to be a pretty popular topic of discussion. I often see this question on many of the QuickBooks forums and newsgroups that I often hold, so here is a little tutorial for setting up a weekly deduction for child support.
Quick facts about child support decoration:
- Child support is a post (after) tax deduction from the employee’s paycheck.
- You may want more than one child allowance deduction.
- It is appropriate to have employee-specific deduction items on your payroll.
- It is not necessary to have employee-specific liability accounts in your account plan.
Creating a deduction item for garnishing children in QuickBooks is fairly easy.
- From the Lists list -> select Payroll List
- Click the Payroll record button (bottom left) -> and select New
- Select EZ Setup Method -> click the Next button
- Select the Other deduction -> option and click the Next button
- Select the Salary garnish option -> click the Next button
- Enter information about who the money will be sent to (this is a QuickBooks provider), the account number to be displayed on the check, and how often the money should be sent -> click the Next button, and then click Finish.
At this point, QuickBooks has created a payroll deduction item in your payroll called payroll deduction. You probably want to edit this topic by changing its name to something more meaningful – maybe something like Employee X Child Support OR Employee X CS.
- Go to Lists -> Payroll List -> find payrolls and double click on it to edit.
- In the Enter name for deduction box (that is, payroll deduction), simply enter Employee X CS -> and click Next
- For the liability account, make sure you select (or create) a sub-account in the regular payroll account – a quick trick to add a subaccount right here in this window is to first select the default payroll account, then click the box and type “: Child Support” (without offer), you will immediately be notified that the account does not exist and you must choose Setup; create the account and then select it.
- Keep clicking the Next button in the following windows, do not change anything until you arrive at the last window; where you select Finish.
Add child support garnish to the staff record
- Find and edit the employee from the employee center
- Switch to the Salary and Compensation section using the Change Tabs drop-down menu
- Click the Add-ons, Deductions, and Business Contributions section, and select the deduction item in the Item Name column and give it an amount.
Each week, as you run payroll, the stated amount is deducted from the payroll for employees and sent to the liability account and displayed on your chart of accounts or balance sheet report.
To actually generate the check to be sent to the fundraising agency, go to the Payroll tab of the Employee Center and select it from the Payroll Schedules section.
I hope you find this written tutorial helpful, if so, leave a comment.