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Level 2

Online Payroll - Void and then Reissue paycheck

I have found that a client was not handling the STATE local income taxes correctly on some employees. The problem was that Ohio and Kentucky have reciprocity. The payroll was processed by deducting the STATE income where the employee worked which was Kentucky, when the employee lived in Ohio and these states have reciprocity. Hence only Ohio should have been deducted. Now that the employee profile has been corrected to properly withhold the correct State income tax, these taxes should be fixed year to date.


As it is early in the year/quarter, this should be fixed so the employees W-2 etc is accurate for 2021.  I could only void the most recent pay check. (Intuit back office is working on older voids) The void/adjustment put the net amount of the check back into the bank as a "funds adjustment". I would like to now reissue that paycheck. There is a difference obviously in the State Income tax amounts. All employees should get the difference in tax monies refunded to them.


When I attempted to run a new payroll for the reissued check, it was noted that the full amount would be direct deposited to the employee. I don't want that full amount paid again,   only the tax difference. So how does the "funds adjustment" get netted out?


I did ask Intuit yesterday how to get the "reissued" checks posted and the extra tax monies refunded/paid to the employees, but I am still waiting for a response. I am hoping to get this cleaned up before the clients next payroll run.


Does anyone out there know how to do this?

QuickBooks Team

Online Payroll - Void and then Reissue paycheck

Hello there, @mknight1956.


I'm here to ensure you're able to reissue a paycheck that only contains the tax difference (funds adjustment) and not the full amount in QuickBooks Online (QBO) Payroll. This way, you're able to fix employees' W-2s and keep accurate payroll data for 2021.


You need to create a zero net paycheck for the tax difference or payroll adjustments. With this, you're able to pay the appropriate amount to the affected employees. Let me guide you how.


You'll first have to add an Other Earning pay type to the employee's profile. Then, use the Net to gross formula to determine the gross pay amount. Once ready, here's how:

  1. Go to the Payroll menu.
  2. Select Employees.  
  3. Click the Run payroll button.
  4. Choose an employee and pay schedule.
  5. In the Other earning box, enter the amount determined by using the net to gross formula.
  6. Select Preview payroll.
  7. Select the edit (pencil) icon beside the Net pay amount.
  8. Zero out all unwanted deductions. Then, edit the Federal Income tax or State Income tax amount and click OK.
  9. Select Preview Payroll. Then select Submit payroll.


After that, I'd recommend pulling up the Payroll Details report. This is to confirm that the tax adjustments are recorded accordingly. Just go to the Payroll section from the Reports menu's Standard tab.


Let me know how it goes in the comments below. If you have other payroll concerns, I'm just around to help. Take care always.


Level 2

Online Payroll - Void and then Reissue paycheck



Thank  you for your response! It was very helpful.

Based on what you told me, there is/was no need to VOID the original paychecks then? If that is the case, how do I fix now that these original checks were voided and the back office has a spreadsheet of 8 more checks to void?

Sigh...why didn't my help "chat" suggest this yesterday?

Looking for your assistance. Thank you!

QuickBooks Team

Online Payroll - Void and then Reissue paycheck

You're welcome. It's our pleasure to help, @mknight1956.


I'd still suggest you wait for an update from our Customer Support if you need to void those paychecks since they're currently processing them. Creating a zero net paycheck will withhold an entire paycheck and put it toward income tax.


You can reach back to our Customer Support to check for any updates about it. You can reach our Customer Support for QuickBooks Online (QBO) by going to the Help icon at the top right of the account. Follow the steps below: 

  1. Go to the Help icon to connect to a live support agent. 
  2. Provide us with some information about your concern.
  3. Select the Contact Us button and provide some details about this concern, then on the Let's talk button. 
  4. You'll now be provided options on how to connect to our Customer Support.

Here's the contact the QuickBooks Online Customer Support team article for more information. 


You can also refer to the following article on how to create a zero net paycheck.


Let me know if you still have questions. I'm always here to assist. Have a great rest of the day!

Level 2

Online Payroll - Void and then Reissue paycheck

To summarize the problem and resolution;

I reached out to Intuit CHAT once again today to follow up with my request from Friday. This has been a very frustrating process. I spent over an hour on CHAT Friday with no resolution but a promise that I would be emailed back within the day with an update. The problem was escalated to the back office. I heard nothing, reached out here to the community about the process to correct paychecks with incorrect taxes withheld. Do I void/reissue etc?   I did learn about issuing a zero check, but still not really sure how that makes sense in this situation.  If it's a zero does the employee get the overwithheld/excess income tax funds withheld? I reached back out to CHAT today. Over an hour and still was being asked what the problem was. There is no record of my previous discussion for a new person to review? So while on CHAT, I asked for a call back from Intuit. While in Chat and still answering their questions, Don on the phone call heard my question/problem, and immediately understood what needed to be done! He emailed me while on the phone and I exchanged further details with him to get the problem solved. 


For future reference; this is what I learned when you discover taxes were not withheld properly on an employees paycheck; 

EDIT the current paycheck to correct taxes withheld. 

Any checks older than the current paycheck need to be corrected by INTUIT in the back office. Supply them with the details of what check and what taxes need to be corrected. It will take them about a week to correct. 


There is no Zero check involved. Once the back office makes the correction if/any additional taxes will be reflected on the employees next paycheck. 


This question/problem shouldn't have been this difficult. But hopefully will help someone else in the future. 

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