Addressing critical diagnostic messages for reconciliation forms

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For payroll compliance (annually licensed)

You may receive a critical or informational diagnostic message for a number of reasons depending on the federal or state forms you are processing.  The types of critical diagnostic messages you may receive are as follows:

  • Critical: You can't process paper type payroll tax forms until you resolve the issues.
  • E-file critical: You can't process payroll tax forms using the internet or electronic methods until you resolve the issues.
  • E-file payment critical: You can't process internet with payment or electronic with payment files until you resolve the issues.

Here are some examples of the types of messages you may see and ways to resolve the issues.

See also: Workflow - Processing payroll tax reconciliation forms

The following item(s) are missing and/or incorrect

Missing setup information

Missing setup information How to resolve this

Client PIN

 Add the Client PIN in the  Additional Information dialog. For more information about using client PINs, see E-filing 94x forms - overview.
Client payroll name Add the client payroll name in the Main tab of the Setup > Clients screen.

Tax Preparer signature

 Select a staff name from the Preparer drop-down list in the Additional Information dialog. The names available in the Preparer drop-down list are staff members that have the Payroll form preparer checkbox marked in the Main tab of the Staff screen.

Preparer phone

 Enter the business phone number in the  Main tab of the Staff screen for the staff person selected as the preparer in the Additional Information dialog. 

Taxpayer name

 Select a name from the Taxpayer drop-down list in the Additional Information dialog. The names available in that list are a) contacts of the client that have been added in the Additional Contacts dialog and have the Payroll signer checkbox marked or b) contacts of the firm that have been added in the Additional Contacts dialog and have the Reporting agent checkbox marked.

Taxpayer business phone

Enter the business phone number for the taxpayer in the Phone and fax Numbers section of the Additional Contacts dialog. Then make sure that the taxpayer is selected in the Taxpayer drop-down list in the Additional Information dialog. 

All files using the Modernized e-File (MeF) format must include the taxpayer phone number, not just those files that include a payment.

Taxpayer Business Name Control

 Enter the  client's Business Name Control in the  Federal 94x Additional Information dialog. For further information see this PDF about  Business Name Controls.
Unemployment ID Enter this information for the client in the Payroll Taxes tab of the Setup > Clients screen
Withholding ID
Employer Name, City, or ZIP Enter this information for the client in the Main tab of the Setup > Clients screen
Social Security number Enter this information for the employee in the Main tab of the Setup > Employees screen

Taxpayer payment information

 This can refer to various types of payment information. For example, Account number for [[checkbook]]. Resolve this by entering the checkbook name in the Main tab of the Setup > Bank Accounts screen.

Tax year of discrepancies

 This displays when Form 94x Schedule D is incomplete, or if you do not need to file a Form 941 Schedule D. Your options are to complete the form or to mark the Do Not File checkbox for the 941 Schedule D in the Forms section of the Payroll Taxes tab of the Setup > Clients screen.

Negative value on Line 12 

This message is uncommon, but it can also display for a number of lines and fields other than Line 12. If you have a field that contains a negative amount, you will need to override the amount on the form by editing it in the Actions > Edit Payroll Tax Forms screen to make the total in that field zero or higher. 

Line 12 does not equal the Schedule B (941) or Line 12 does not equal Line 16

This message will differ depending on the client's deposit schedule. For semi-weekly filers, the messages is Line 12 does not equal the Schedule B. For Monthly filers, the message is Line 12 does not equal Line 16. This diagnostic message displays if the Form 941 tax deposit was under-paid and will continue to display even after you process liability adjustments. There are two ways to clear this diagnostic.

  1. Clear overrides in the Schedule B. 
  2. Delete and re-enter the original payroll checks using the correct taxability settings. This method would be necessary only in certain cases, and should be a last resort. It may be necessary to make sure that none of the tax item calculations are overridden and to ensure that all checks have pay items with the same taxability (in a situation where the taxability of a pay item has changed mid-year). 

For more information, see:

Balance of ($0.02); Open liabilities of $0.00; Final balance of ($0.02) (Form 941 Informational message)

This can generally be resolved by  processing liability adjustments.

Open liabilities do not equal the balance due

There are a few ways to clear this diagnostic.

  1. Process liability adjustments
  2. Add historical/closed liabilities
  3. Add or delete unpaid liabilities 

Balance due >$2500

This message displays if you choose the Electronic with payment filing method and the balance due is greater than $2500. The IRS requires that you paper file the form.

Form NNN is not yet available for the selected filing period

This message requires no action from you. 

No employee wages present, no filing is required

This message requires no action from you.

Form 940 cannot be filed electronically for the following reasons

No SUI taxable wages to determine line 1a or 1b

This message is rare, but it displays if you are processing the form for a credit reduction state but you have no SUTA wages. In this case, you will need to file using the paper filing method.

Form 94x cannot be filed electronically for the following reasons

Filing period too old

Electronic filing is available for the current and prior year forms. In this instance you must file using the paper filing method.

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