How do I record HST refunds being used by CRA to cover balances owing from other periods

Hi LizSmeth,

It's nice to see you reaching out to Community.  Recording a refund for prior tax periods is essential for keeping your accounts aligned.  QuickBooks Online allows you to record your refund directly in the sales tax center.  I'd be happy to show you how!

To record your refund, follow these steps:

1. Open Taxes from the left menu and select Sales Tax

2. Using the All returns drop-down choose Filed from the list

3. In the Action column, select Record Refund using the drop-down arrow

4. Enter the Refund information

5. Once you've recorded the refund you'll see it in your account history

Here's an article for your reference on how to file sales tax in QuickBooks Online.

If you require additional assistance with this, I recommend reaching out to your accountant for their expertise.  If you don't have one, we can help you locate a ProAdvisor in your area.

Please feel free to reach out with any other questions you may have.  We'd be glad to assist!

Thank you Trish.

That's not quite the answer I'm looking for.  The refund from the CRA doesn't agree to the refund as filed in QB because the CRA retained a portion of it to pay for penalties and interest on a prior HST period.  

I've set up the client's penalties but cannot use the refund on hand to pay them.

I also have 2 refunds to use up but QBO will only allow me to choose one of them.  So now this simple transfer of funds and recording of refunds is going to take 16 steps.  From QB desktop I could easily choose any payments and credits I need but, for some reason, QB Online refuses to offer access.  I do not understand why QBO is such a terrible program when compared to its origins. :(

Hi LizSmeth,

Thank you for the additional information.  In situations like this it's always best to reach out to your accountant or an associate for the best course of action for this type of entry.  In QuickBooks Online you'll also have the option to adjust the sales tax liability when required.  I hope this helps!

Let us know if you have any other questions.  We're here for you!

We are the accountants and I've been a QuickBooks ProAdvisor for 20 years. 

Does anyone have more information?  This is most definitely not a unique situation.  It happens very frequently and I'm surprised that it's this difficult.  

Has anyone found a work-around to QBO's restrictive functions?

I have this same question!!

Client has four GST quarters with refunds being held by CRA and CRA has used them up by transferring amounts to other periods. There is also interest being accrued on rebates and that interest is also used to pay future GST periods.

How do you enter in Quickbooks to reflect these transactions?

Hi, how do I match this entry to the 2 deposits I got (GST and QST) from the governments, so the bank works out?

Hey there Alero,

Thanks for turning to the Community for support. QuickBooks Online is a great software to have. It helps keep your books balanced. I can provide some information about matching transactions. 

Making sure you're recording your transactions properly in QuickBooks is an essential step for maintaining clean books. Here is an article that will help you understand how to match transactions. You will also find step by step instructions. Click here to view the article. 

If you have any other questions, feel free to reach out here.

Did you ever figure out how to fix this? 3 years later and I am having the exact same issue. 

Did you ever figure out how to fix this? 3 years later and I am having the exact same issue. 

No simple solution has ever been offered - I've ended up just recording all HST payments and refunds through petty cash as the exact amount that was filed and then any balance adjustments through interest or other tax programs are recorded through petty cash.  Bank also gets a generic transfer for the actual CRA balance through petty cash, bringing the net petty cash balance to NIL (or back to wherever it was before).   It's completely ridiculous and one of the worst functions QBO has.

Sorry to say.

It's been awhile but I used an Asset clearing account (a Bank type)

I Deposited refunds into it.

Penalties and interest can be added to the tax "bill" through the Tax module. Make sure you set the date correctly.

Interest earned needs to be added to the clearing account by a Journal Entry.

Payments to CRA are made in the tax module of QBO but through the clearing account if there is a positive balance on CRA account.

Print off the CRA transactions list and follow that. It is very convoluted but can be done. Haha.

Hope that helps.