In order to conform to new IRS W-2 reporting requirements, QuickBooks (in payroll update 21112) added new “tax tracking types” for employer paid (company match) retirement contributions.

According to Intuit’s article Id 2001179 (http://payroll.intuit.com/support/kb/2001179.html), for companies with existing match transactions in the current year, a new payroll item needs to be setup with the new tax tracking type based on the type of plan. Adjustments need to be made to transfer the year-to-date values from the existing company match payroll item to the new item.

This process can be a little tricky. Payroll liability adjustments should be made quarterly for each employee. Since this is for W-2 reporting, the liability adjustment selection should be for the employee, not the company.  Also, each one of the liability payments need to be changed individually to reflect paying the new payroll item.

Payroll item reports should be run before and after to insure that all of the adjustments were made properly.

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