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Level 1

I over withheld on an employees social security and medicare. How do I refund and record it in QB

how do I record an overpayment of social security and medicare to an employee


QuickBooks Team

I over withheld on an employees social security and medicare. How do I refund and record it in QB

Good day, @Kate66.


I'm glad you've reached out to us. Let me help walk you through on how to record an overpayment for your employee. 


When payroll liabilities are overpaid, the liability balance becomes negative. Since you've got a refund, you can record a refund check to increase the balance that'll correct your Payroll Liabilities.


First, you'll need to run the Payroll Liability Balances report to check for credits (amounts with negative values) that match the amount of refund and the tax item.


Here's how:

  1. At the top menu bar, click Reports.
  2. Select Employees & Payroll.
  3. Click Payroll Liability Balances.
  4. Set the date filter.

Once done, you can now record the the refund check by following the detailed steps found in this article: Record a payroll liability refund check


Next, to refund the employee for the Social Security and Medicare taxes withheld, you can use a non-taxable addition item to adjust your employee's next paycheck. 


For additional reference, you can check this article on how to create a non-taxable reimbursement payroll item.


Once you created the employee's paycheck, under Other Payroll Items, select the addition item you created, then enter the amount. That should adjust the amount on the paycheck of the employee. 


If you need further assistance with the steps from our live support, I encourage you to contact our QuickBooks Desktop Payroll Support Team. They have the tools to pull up your account and do remote session.


Here's how you can contact our live support: 

  1. Follow the Official Intuit Contact link.
  2. Select your QuickBooks product.
  3. Select an issue type from the menu below, you need only to select two options for the contact information to appear.
  4. Click Start a message at the bottom.

This will get you on the right track. Feel me in if you have additional questions about recording a refund in Quickbooks. I'll be around to help. Have a good one. 

Level 1

I over withheld on an employees social security and medicare. How do I refund and record it in QB

I have the completely opposite problem. I under withheld social security and medicare from an employee for 3 paychecks in a row, 9 months ago. I discovered the problem as I was preparing w-2s and noticed the wages (in box 1) didn't match the social security wages (in box 3) or the medicare wages (in box 5). I know I can file a 941x, but I don't know how to record the activity in Quickbooks to match the 941x. I also don't know what to do about the employee portion that was supposed to be withheld from the employee. Am I supposed to now withhold that from her pay, or do I only pay the company portion to the IRS?


This situation is different than others I've encountered because I didn't really under-report; I under-withheld. It seems atypical for the 941x filing.


I over withheld on an employees social security and medicare. How do I refund and record it in QB

Thanks for joining this conversation,


If there's an overpayment/underpayment for Social Security and Medicare, QuickBooks will try to correct the calculation on the next pay period. In this case, you can do a liability adjustment to fix the amounts. This will also help match the figures in the 941-x. Also, you should withhold that from the employee's pay.


Before proceeding with the steps, adjusting payroll liabilities can be tricky. I highly suggest consulting your accountant to help and guide how to record this work. He/she can provide more expert advice in dealing with this concern.


Please refer to this article for the detailed steps on how: Adjust payroll liabilities in QuickBooks Desktop.


Just in case, I'll add these articles for future reference:



Please let me know if you have any other issues or concerns, and I'll get back to you as soon as possible. I want to make sure everything is taken care of for you. Have a good one!

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