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Quarterly tax reconciliation debit

As each payroll is processed, Gusto debits the appropriate payroll taxes that apply to your company. We then file and pay all of your quarterly and annual taxes.

If adjustments are made to your account that affect the amount of taxes owed for the quarter, you may be liable to pay more to the federal and state agencies. To accommodate this difference, we'll debit your company for the additional taxes at the end of the quarter. This tax reconciliation debit ensures that the correct quarterly tax amounts have been paid to each agency.

Tax reconciliation causes

  • Mid-Quarter State Unemployment Rate Change: This occurs when your State Unemployment Insurance (SUI) rate changes for the current quarter due to reasons specified by the state unemployment department.
  • Mid-Quarter Tax Exemption Changes for Employees: This occurs when employees are either exempt or have been improperly exempt from certain taxes.
  • FUTA Credit Reduction States: This occurs if you are an employer in a credit reduction state, and a higher tax is due on federal Form 940. This debit typically happens at year end.

View your tax reconciliation debit

  1. Navigate to the Reports tab.
  2. Toggle over to Payroll History tab at the top of the page.
  3. Click Reconciliation Debits on the bottom right corner.
  4. Hover over [Q1 20XX] and click View Details.
  5. Hover over the Reconciliation Debit entry and click View Details.

Tax reconciliation email

At the end of the quarter, a tax reconciliation email is sent to all of our customers who will be debited for additional taxes. This debit typically occurs a few business days after you receive the email.

The email will detail the payroll tax in question, the reason for the collected tax amount, the total amount that will be debited, and the date the debit will occur.

Payroll, benefits, HR and more.