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I overpaid our 4Q2016 payroll taxes. The 941 was submitted with the correct amount and that the refund would be applied to the next payment. How do I do that?

I paid the Dec 2016 payroll taxes, and the next day, I discovered an employee's paycheck was dated for 12/31/16 and it needed to be 1/1/2017. When I corrected, this resulted in an overpayment of our payroll taxes. The 4Q2016 941 I filed showed this overpayment ($201) and I asked that it be applied to the next return. I don't know how to adjust the next payroll taxes to be paid for this overage. I had to pay the January payroll taxes, and they included that $201 again. How can I correct for February when I go to pay those payroll taxes?

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Best answer 12-10-2018

Accepted Solutions
Community Contributor **

Hi fellowshipinocal, You can enter a prior payment for th...

Hi fellowshipinocal,

You can enter a prior payment for the overpaid amount or apply it as a credit to the payroll tax liability. 

To do enter a prior payment:

  1. Click Help at the top menu bar, then select the last option which is About (your QuickBooks version).
  2. Once the green screen with your QuickBooks information appears, press Ctrl + Alt + Y at the same time.
  3. Click Next until you're under the Enter prior payments window.
  4. Click Create Payment. If you have an amount in the table, click Next Payment until you see an empty table.
  5. Change the Payment Date and For Period Ending date.
  6. Choose your tax items under the Item Name column and enter the Amounts. You can enter a memo if you want (see attached screenshot).
  7. Click Accounts Affected, and choose Affect liability accounts but not the bank account.
  8. Click OK, then Done, and Finish.

To apply the amount as a credit to the payroll tax liability, please check out the Apply a liability overpayment as a credit to payroll tax liabilities article.

Please let me know if you have other questions.

1 Comment
Community Contributor **

Hi fellowshipinocal, You can enter a prior payment for th...

Hi fellowshipinocal,

You can enter a prior payment for the overpaid amount or apply it as a credit to the payroll tax liability. 

To do enter a prior payment:

  1. Click Help at the top menu bar, then select the last option which is About (your QuickBooks version).
  2. Once the green screen with your QuickBooks information appears, press Ctrl + Alt + Y at the same time.
  3. Click Next until you're under the Enter prior payments window.
  4. Click Create Payment. If you have an amount in the table, click Next Payment until you see an empty table.
  5. Change the Payment Date and For Period Ending date.
  6. Choose your tax items under the Item Name column and enter the Amounts. You can enter a memo if you want (see attached screenshot).
  7. Click Accounts Affected, and choose Affect liability accounts but not the bank account.
  8. Click OK, then Done, and Finish.

To apply the amount as a credit to the payroll tax liability, please check out the Apply a liability overpayment as a credit to payroll tax liabilities article.

Please let me know if you have other questions.

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