How to Change the South Dakota Unemployment Rate (SUTA)

When you receive a letter from the SD Unemployment Insurance Division at the end of each year, you will need to determine whether or not your rate has changed. If your rate has changed, you will want to update the payroll item in QuickBooks, preferably before your first payroll in the new year. If you have already processed payroll for the new year, no worries, you can still update the SUTA rate.

To change the SUTA rate, go to lists and then payroll item list. Right click and edit the payroll item. Once you get to the screen with the percentages, you can enter the new rate. A warning will pop up explaining that QuickBooks will not change completed paychecks, but will “catch up” using the new rate on new paychecks. The tax calculated will be higher or lower than normal until the year-to-date tax is in balance. Also, remember that most companies have two SUTA rates; UI contribution rate and investment fee rate.

Deleting Items from a Prior Year

A common question ProAdvisors get asked is if an item (check, invoice, deposit, etc.) can be deleted from a prior year. The answer is always “no.” Once a year, or even a period, has been tied out and closed, do not make changes to that data. Make a journal entry in the current period for a correction. Then, make a note in the memo indicating which check number or invoice number is being corrected for future reference.

For example, you are ready to close out July 2016 when you notice that you mistakenly entered two invoices for the November 2015 cleaning service. To correct this, create a credit memo in the current period, July 2016, to void that invoice. Then, apply the credit to the invoice. If you use the void feature in QuickBooks, it will void the invoice in 2015, which is not what we want.

To correct checks or deposits in prior periods, use a journal entry. For invoices and receivables, use a credit memo. Keep in mind, that if you are clearing old checks or deposits with a journal entry, you will need to clear the item and the journal entry in your bank reconciliation.

How to Create a New Sales Tax Rate

After the new sales tax rate this summer a lot of questions came up on how to get the new rate into QuickBooks. This should be done by creating a new sales tax item, which will allow you to keep record of old sales tax items and won’t adjust the sales tax on previous invoices. Please keep in mind that the sales tax items in memorized invoices will need to be updated to include the new state sales tax rate.

Call the KTLLP QuickBooks ProAdvisors Team with your questions.