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Frequent Contributor *
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How do we record a Corporate Tax Refund?

Our Corporation Notice of Assessment came in and we received a refund.  In the journal entry, do I debit the bank and credit the Federal Taxes Payable account (Other Current Liability) or the Taxes Payable (Expense account)?

Best answer 03-11-2019 06:05 PM

Accepted Solutions
Community Contributor ***

Do not enter it as a JE -- you very rarely enter JEs in Q...

Do not enter it as a JE -- you very rarely enter JEs in QuickBooks.  Enter it as a deposit, posted to the income tax expense account since it is a refund of your overpayment.

I hope this was helpful.
11 Comments
Community Contributor ***

Do not enter it as a JE -- you very rarely enter JEs in Q...

Do not enter it as a JE -- you very rarely enter JEs in QuickBooks.  Enter it as a deposit, posted to the income tax expense account since it is a refund of your overpayment.

I hope this was helpful.
Frequent Contributor *

Thank you!

Thank you!
Community Contributor ***

You're welcome. :)

You're welcome. Smiley Happy
Not applicable

Hi Michele, Will this way you are suggesting work for pay...

Hi Michele,
Will this way you are suggesting work for payroll tax refunds or will it make my account go negative next payroll tax payment?
I tried the payroll tax refund feature in the payroll feature but it messed with the accounts and I had to enter an adjustment, it was a mess using the payroll tax feature.
I was hoping just doing a deposit like you describe would be less of a mess...
Established Community Backer ***

Suggest you fix expense account to be called "Tax Expense...

Suggest you fix expense account to be called "Tax Expense" since "Tax Payable" is a liability account name.
Not applicable

Should this deposit be backdated to tax year  the refund...

Should this deposit be backdated to tax year  the refund was for or the date received?
Established Community Backer ***

You Make Deposit for the Date you got the Money and you D...

You Make Deposit for the Date you got the Money and you Deposit this as "tax expense" refund, for a C Corp. For any other entity type, there is no Income Taxes expense for that entity.
Active Member

Hi, I'm using Quickbooks desktop pro 2019.  This is for a...

Hi, I'm using Quickbooks desktop pro 2019.  This is for a corporation.  We received an income tax refund.  I see the Income Tax Payable account has a negative amount (which matches the amount we just received from CRA).  Can you tell me how to record a deposit to clear out this negative amount?   I know, it's a very basic question..."Enter it as a deposit, posted to the income tax expense account since it is a refund of your overpayment" .... where do I go to enter a deposit?  I normally go to  receive payments screen but that's for customer invoices, and not for corp tax refunds.  Any pointers are appreciated. Thx.
Established Community Backer ***

"where do I go to enter a deposit?" Banking menu > Make...

"where do I go to enter a deposit?"

Banking menu > Make Deposit.
Frequent Contributor *

hoymich you can make a deposit for tax refunds in the "Ma...

hoymich you can make a deposit for tax refunds in the "Make Deposits" window.  You have to manually fill in the "Received From", "Account", "Memo" etc.  Then Save and Close.
Active Member

Thanks Diane and qbteachmt.  I appreciate the quick respo...

Thanks Diane and qbteachmt.  I appreciate the quick response.  I figured it out right after I posted the question....glad it's the same as your suggestion, re-assuring  :-)