How to Change the Bank Account for E-Payment of Tax Liabilities in QuickBooks

Introduction

Managing tax payments efficiently is crucial for any business, and QuickBooks offers e-payment options to simplify this process. Sometimes, you may need to change the bank account associated with e-payments for tax liabilities due to a change in your primary bank account or other financial management needs. This guide will walk you through the steps to change the bank account for e-payments of tax liabilities in QuickBooks.

Why Change the E-Payment Bank Account?

1. Account Management: As businesses grow, they often open new bank accounts, requiring updates to QuickBooks e-payment settings.
2. Security: Switching to a more secure account ensures that tax payments are protected.
3. Streamlined Finances: Using a specific bank account for tax payments can help simplify bookkeeping and reconciliation.

Step 1: Access Payroll Settings in QuickBooks

To change the bank account for e-payment of tax liabilities, you first need to access the payroll settings in QuickBooks.

1. Log into QuickBooks: Sign in to your QuickBooks Online or QuickBooks Desktop account.
2. Go to the Gear Icon > Payroll Settings:
   • In QuickBooks Online, click on the Gear Icon in the upper-right corner, then select Payroll Settings under Your Company.
   • In QuickBooks Desktop, navigate to Employees > Payroll Setup.

Step 2: Change the Bank Account for E-Payments

Once you’re in the payroll settings, follow these steps to update the bank account associated with your tax payments.

2.1: Access the Bank Account Information Section

1. Select Bank Accounts: In the Payroll Settings menu, locate the section labeled Bank Accounts.
2. Choose Tax Payments: In QuickBooks Online, you will see options for both Direct Deposit and Tax Payments. Click on Tax Payments to proceed.

2.2: Update Bank Account Details

1. Click Edit: Find the bank account currently linked to tax payments and click Edit.

2. Enter New Bank Account Information:

   • Bank Name: Enter the name of the new bank.
   • Routing Number: Enter the routing number for the new bank account.
   • Account Number: Enter the new account number for tax payments.
   • Account Type: Select the account type (checking or savings).

3. Verify Account Information: Double-check the information to ensure there are no errors. Incorrect details could lead to failed tax payments.

2.3: Confirm the New Account

1. Submit the Information: After entering the new bank details, click Save or Submit.
2. Verification Process:
   • QuickBooks may require you to verify the new bank account. This verification can involve confirming small deposits that QuickBooks will send to the new account.
   • Follow the on-screen instructions to complete the verification process.

Step 3: Verify the Bank Account (If Required)

If QuickBooks requires bank account verification, you will need to confirm the micro-deposits sent to your new account. This process typically takes 1-3 business days.

1. Wait for Micro-Deposits: QuickBooks will make two small deposits into your new bank account.
2. Log into Your Bank Account: Check your bank statement for these deposits.
3. Enter Deposit Amounts in QuickBooks:
   • Go back to Payroll Settings in QuickBooks.
   • Find the bank verification section and enter the two deposit amounts to verify the account.

Step 4: Confirm the E-Payment Setup

Once the new bank account is verified, it’s important to confirm that e-payments for tax liabilities are set up correctly.

1. Go to Payroll Tax Center:
   • In QuickBooks Online, go to Taxes > Payroll Tax.
   • In QuickBooks Desktop, go to Employees > Payroll Center > Pay Liabilities.
2. Review the Bank Account on Tax Payments: Check that the newly updated bank account is now listed for e-payments. This ensures that all future tax payments will be deducted from the correct account.

Step 5: Run a Test Payment (Optional)

If you want to ensure that everything is working smoothly, consider running a small test payment for tax liabilities. This can help verify that the new account is correctly set up for e-payments.

1. Create a Small Tax Liability Payment: Set up a minimal payment for a small tax liability, such as a portion of payroll taxes.
2. Process the Payment: Complete the payment process and check your new bank account to confirm that the payment was successfully deducted.

Troubleshooting Common Issues

Issue 1: Verification Failed

• Solution: Double-check that the routing and account numbers are entered correctly. If the issue persists, contact your bank to confirm the details or try re-entering the information.

Issue 2: E-Payments Still Deducted from Old Account

• Solution: Ensure that the payroll settings were saved correctly. Go back to Payroll Settings > Bank Accounts to verify the changes. If the old account is still linked, repeat the process and ensure that you click Save.

Issue 3: Micro-Deposits Not Received

• Solution: Wait up to 3 business days for the deposits. If they don’t appear, double-check the account details and try re-initiating the verification process.

Tips for Managing E-Payments in QuickBooks

1. Regularly Reconcile Bank Statements: Make sure that tax payments are being deducted from the correct account by reconciling your bank statements regularly.
2. Set Up Alerts: Some banks offer alerts for transactions, which can help you monitor tax payments and ensure they’re coming from the correct account.
3. Update Account Details Promptly: If you change your business bank account, remember to update it in QuickBooks to avoid missed or failed payments.

Conclusion

Changing the bank account for e-payments of tax liabilities in QuickBooks is a straightforward process. By following these steps, you can easily update your payroll settings to ensure that tax payments are deducted from the correct account, maintaining accurate records and avoiding potential payment issues.

This guide has covered everything you need to know, from accessing payroll settings to verifying the new bank account. For further assistance, consult QuickBooks support or your payroll service provider.