How to set up, track, and pay child support liens in QuickBooks seems to be a fairly popular topic of discussion. I see this question frequently on many of the QuickBooks forums and newsgroups that you frequent, so here’s a little tutorial for setting up a weekly child support deduction.

Quick Facts About Child Support Garnishments:

  • Alimony is a tax deduction (after) from the employee’s paycheck.
  • You may have more than one employee with a child support deduction.
  • It is appropriate to have employee-specific deduction items on your Payroll Items list.
  • It is not necessary to have specific liability accounts for employees in your chart of accounts.

Creating a child support garnishment deduction item in QuickBooks is pretty easy.

  • From the Lists menu -> choose List of Payroll Items
  • Click the Payroll Item button (bottom left) -> and choose New
  • Select EZ-Setup method -> click Next button
  • Select the Other deduction -> option and click the Next button
  • Check the Wage Garnishment option -> click the Next button
  • Enter information about who the money is sent to (this is a QuickBooks provider), the account number that should appear on the check, and how often the money should be sent -> click the Next button and then Finish .

At this point, QuickBooks has created a payroll deduction item in its Payroll Item List called Wage Garnishment. You probably want to edit this item, changing its name to something more meaningful, perhaps something like Employee XO Employee X CS Child Support.

  • Go to Lists -> Payroll Item List -> find Wage Garnishment and double click on it to Edit.
  • In the Enter name for deduction field (it will say Wage Garnishment) just type Employee X CS -> and click the Next button
  • For the liability account, be sure to select (or create) a subaccount of the normal Payroll Liabilities account; A quick trick to add a subaccount right here in this window is to first select the Standard Payroll Liabilities account and then click on the box and type “: Child support” (without the quotes), you will be immediately informed that the account it does not exist and you must select Configure; create the account and then select it.
  • Keep clicking the Next button in subsequent windows, without changing anything, until you reach the last window; where you will select Finish.

Add child support garnishment to employee record

  • From the Employee Center, find and edit the employee
  • Switch to the Payroll and Compensation section using the Change Tabs drop-down menu
  • Click the Company Additions, Deductions, and Contributions section and in the Item Name column, select the deduction item and give it an amount.

Each week when you run payroll, the specified amount will be deducted from the employee’s paycheck and posted to the responsibility account and displayed on your chart of accounts or balance report.

To actually generate the check that will be sent to the Agency collecting the money, you will go to the Payroll tab of the Employee Center and select it in the Pay Scheduled Liabilities section.

Hope this written tutorial is helpful to you; if so, leave a comment.

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