How to correct HST payment recorded as cheque expense

Hi CathyDCC,

Welcome to the Intuit Community! QuickBooks Online Sales Tax feature, enables you to prepare, file and record your payments.  It's important that you're able to create the payment method and submit it on time.  I'd be happy to help!

To correct an HST payment recorded as a cheque expense in QuickBooks Online and ensure it clears the Sales Tax module, you can follow these steps:

Correcting the HST Payment

Delete the Incorrect Cheque Expense:

• Go to the Expenses menu.
• Find and select the cheque expense you recorded for the HST payment.
• Click on More at the bottom and select Delete.

Record the HST Payment Correctly:

• Go to the Taxes menu and select Sales Tax.
• Click on the Filings tab and locate the tax filing you need to correct.
• Select Record Payment from the dropdown menu next to the filing.
• Choose the account you are making the payment from and enter the payment details.
• Ensure the payment is categorized correctly under the appropriate tax account (e.g., GST/HST Payable).

Making Future HST Payments

Go to the Sales Tax Module:

• Navigate to the Taxes menu and select Sales Tax.

Record the Payment:

• Click on the Filings tab and find the tax period you need to pay.
• Select Record Payment from the dropdown menu next to the filing.
• Enter the payment details, including the bank account and payment date.

Write the Cheque:

• Go to the + New button and select Cheque.
• Fill in the cheque details, ensuring it matches the payment recorded in the Sales Tax module.
• Save and print the cheque if needed.

By following these steps, you can ensure that your HST payments are correctly recorded in QuickBooks Online and clear the Sales Tax module.

I hope this helps! If you have any other questions, feel free to reply below.

Thank you for this information.

Firstly, the expense cheque that was written has cleared our bank and been reconciled, so I'm presuming I would have to unreconcile it to delete as the first step, or can I leave that part of the entry and just record the payment in the Sales Tax module?

Could you explain the entries that occur when you select Record Payment in the Sales Tax Module? Does it involve crediting the bank with the payment made since part of the process is to select the bank account used for the payment. 

My apologies for so many questions!

Hi CathyDCC,

After you've deleted the expense for the HST payment, you'll proceed to follow the steps provided by my colleague, and record your sales tax payment.  Please make sure the payment date is accurate and aligned with your bank account.  Then follow these steps to mark the transaction as reconciled, so your account remains balanced;

1. Go to your Settings ⚙ and select Chart of accounts

2. Find the account holding the transaction, then select Account history in the Action column

3. Select the transaction you want to reconcile to expand the view.

4. Review the ✓checkmark column

5. Click in the checkbox, to change the letter until you see an R. This marks the transaction as reconciled

6. Hit Save.

You're all set!

Feel free to let us know if your questions have been resolved.  Your success is our number one priority, and we are always glad to help!

Thank you for the update, if I'm understanding correctly, after I unreconcile and delete the HST payment made by cheque, I then go through the Sales Tax Module and use the Record Payment function.   I'm trying to get a better understanding of the entries QB generates when doing this. I'm presuming it debits your HST Liabillity and credits your bank?  If that's the case, how then do you write a cheque to pay the HST without duplicating this entry?

Maybe I'm missing a step here?

Hi CathyDCC,

QuickBooks Online automatically adds the GST/HST Payable and GS/HS Suspense accounts, when you set up sales tax. Each transaction recorded with GST/HST/QST is added to the GST/HST Payable account. The GST Suspense account should balance out and remain at zero. It will fluctuate depending on he sales tax filings, depending if it's a refund or a payment. Once you've completed the sales tax return, a two-line journal entry is created, that moves what you owe (or what is owed to you) from the GST/HST Payable to the GST/HST Suspense account. Recording the sales tax payment moves the amount from the Suspense account to the bank account.   Since the payment must be paid outside of QuickBooks, you'll want to create a cheque or expense.  This will enable QuickBooks to match the transaction with your bank account, so you can reconcile the account seamlessly.  If you've already created a cheque/expense, you can edit the payment date, so it remains aligned with your bank.

I hope you find this to be helpful!

Thank you for the additional information, I'm not clear what you mean by the payment being made outside of QB?  I wanted to create and print the cheque for payment within QB.  If I record the payment in the sale tax module and then create and expense, I believe this will duplicate the entry - the first through the sales tax module would credit my bank as a payment without a cheque number, then if I create an expense cheque in QB, this would then duplicate the same entry would it not?

Hi CathyDCC,

Thank you for getting back to me.  My apologies.  You would not need to create an additional cheque/expense to record your sales tax payment.  This is all completed when filing and recording the payment details within the sales tax module.  However, your payment to the CRA must be made outside of QuickBooks Online and cannot be done by QuickBooks.  See Step 4, in this helpful guide.

Let me know if you have any other questions.  I'll be close by!