How to set up, track, and pay child support liens in QuickBooks seems to be a pretty popular topic of discussion. I see this question frequently on many of the QuickBooks forums and newsgroups I frequent, so here’s a little tutorial for setting up a weekly child support deduction.

Quick facts about child support garnishments:

  • Child support is a post-tax deduction from the employee’s paycheck.
  • You may have more than one employee with a child support deduction.
  • It’s appropriate to have employee-specific deduction items on your list of payroll items.
  • It is not necessary to have specific employee liability accounts in your chart of accounts.

Creating a child support lien deduction item in QuickBooks is pretty easy.

  • From the Lists menu -> select Payroll Items List
  • Click the Payroll Element button (lower left) -> and choose New
  • Select the EZ-Setup method -> click the Next button

  • Select the Other Deduction -> option and click the Next button

  • Check the Wage Garnishment option -> click the Next button

  • Enter information about who the money is being sent to (this is a QuickBooks vendor), the account number that should be shown on the check, and how often the money should be sent -> click the Next button and then click on Finish.

At this point, QuickBooks has created a payroll deduction item in your Payroll Item List called Wage Garnishment. You’ll probably want to edit this item, changing its name to something more meaningful, perhaps something like Employee X’s Child Support OR Employee X’s CS.

  • Go to Lists -> List of Payroll Items -> find Wage Garnishment and double click it to Edit.
  • In the Enter name for deduction field (it will say Wage Garnishment) simply type Employee X CS -> and click the Next button

  • For the liability account, be sure to select (or create) a subaccount of the regular Payroll Liability account. A quick trick to adding a subaccount right here in this window is to select the Standard Payroll Liability account first and then click the box and type “:Child Support” (without the quotes), you will be immediately informed that the account is not supported. exists and you must select Configure; create the account and then select it.
  • Keep clicking the Next button in subsequent windows, without changing anything, until you reach the last window; where you will select Finish.

Add child support garnishment to employee record

  • From the Employee Center, find and edit the employee
  • Switch to the Payroll & Compensation section using the Switch Tabs dropdown menu
  • Click the Company Additions, Deductions, and Contributions section, and in the Item Name column, select the deduction item and assign it an amount.

Each week when you run payroll, the specified amount will be deducted from the employee’s paycheck and posted to the Liability account and displayed on your Chart of Accounts or on a Balance Sheet Report.

To actually generate the check that will be sent to the agency that collects the money, you will go to the Payroll tab of the Employee Center and select it in the Pay Scheduled Responsibilities section.

I hope you find this written tutorial useful, if so please leave a comment.