Unreconciled payment in banking on Federal Taxes from switchover from IOP to Quickbooks Online Payrill

UGH, hit send and see a spelling error.  Frustration about this has gotten the best of me.  Appreciate any input from the community.

My concern is basically we are being told our tax accountant has to make offsetting entries but I think this is a QBO issue.

Hello there, @Lisa2112. I appreciate the detailed information about the unreconciled payment shown in your QuickBooks account.

Since it's recreated another credit after you deleted the payment, which threw off your banking, I recommend contacting our Customer Support Team. I know you've reached them multiple times, but they have tools to resolve the amount and perform offsetting entries if necessary. 

Here's how:

1. Sign in to your QuickBooks Online company.
2. Go to Help (?).
3. Select Contact Us.
4. Enter your concern, then select Let's Talk.
5. Choose a way to connect with us:

• Start a chat with a support expert.
• Get a callback from the next available expert.

For more details about their support hours, see this link: Contact Payroll Support.

Additionally, you can use this guide anytime you need help doing or fixing a reconciliation in QuickBooks. I've attached an article you can visit to view our complete reconciliation guide: Learn the reconciliation workflow in QuickBooks.

Kindly notify me of how this goes by leaving a comment below. If you have any follow-up questions about reconciliation or concerns with your QBO account, I am happy to answer them. Take care.

@Lisa2112 

"I hit it (yes, I know, wrong) and it recreated the payment which put my banking back in order but now has created yet another credit on 12/1/2023 for that same amount."

Just so I understand - are you saying that you now have a payment and a refund to your bank account which offset and your bank account is correct?  If that's the case, then I'm confused as to why you have a credit that didn't also offset.  What do you mean when you say "now has created yet another credit on 12/1/2023 for that same amount."  A credit to what??

Hi Rainflurry, prior to ever contacting QBO Support there were no transactions in my banking that had to do with this issue.  I was simply creating payroll and every time, at the end, I would get a message that I needed to address tax payments that had not been made prior to using the system.  When I went to payroll tax and looked under the widget "Action Needed" it said in the box "We've got you covered".  I called support just to check on this a few times and they assured me I was all set and could just ignore that message I was getting every time I ran payroll.

Then, I called after the last time I ran payroll.  I just found this concerning and decided to give it one more go to get an answer.  When I reached the person, she did something on the back end and all of a sudden, I saw this line item and it had a resolve button at the end.  The below that it showed a tax payment due of $845.44 for the pay period mentioned in 2021.  She asked if I had made that payment and I told her that all tax payments had been made.  So, she told me to hit the resolve.  It was after this I noticed it had added this to my check register.  Then, I tried to delete it but when I went to the reconciliation page, I could now see my register was out of whack.  In other words, the next time I go to do the checking recon it says it's off by that amount.  Which is odd.  But, in either case, suddenly now, the resolve button had now appeared again.  Upon selecting it again it added yet another refund line item.  I am attaching a png that shows the three transactions I am referring to.

My last call to support netted me a person who said to contact my accountant to do offsetting entries so I could then mark that line item as paid. But, that's an erroneous line item.  There has never been a payment made to the Feds for that amount nor do I owe it.  I believe it to be an issue with the way my payroll periods fall (biweekly) and the switchover from IOP to QBO Payroll and the adjustments were made on the back end.

@Lisa2112 

Based on your screenshot, you must be showing all three of those transactions in your bank account register and one payment and two deposits when you go to reconcile.  Is that what you see? 

You should be able to clear this up by creating a check dated 12-1-23, made payable to the IRS, and assign the 'Federal PR Txs Payable (941)' liability account to the check.  You aren't actually making a payment to the IRS, the check just creates the offsetting entry.  The check does the same thing as if you created a journal entry that debits the 'Federal PR Txs Payable (941)' liability account and credits your bank account because, as it sits, your 'Federal PR Txs Payable (941)' liability account is overstated by $845.55.  The check will create an offsetting entry to the duplicate refund on 12-1-23 that can be cleared the next time you reconcile and it decreases your 'Federal PR Txs Payable (941)' liability account by the amount it is overstated.  All 4 of these transactions will offset and you should be good to go.         

Believe it or not the only one of those transactions that appears in my register is the 4/7/2021 tax payment that is not a real transaction.  I have all my banking statements and this payment was never made to the Feds.  It appears nowhere in my checking statements.

I can only conclude that this was when the switchover was done and something occurred on the back end and what QBO did was to create an offset.  None of this ever appeared on the front end until I talked to a girl in support who told me to select the resolve button.  She kept asking me if we made this payment and I told her that QBO was handing our taxes and since we are now in 2023 I can only assume that was made as we have never received any documentation that taxes were never paid.  

So, in totality, the two refunds you see exist nowhere in my check register nor are they in my banking nor should they be.  The payment you see on 4/7 is in the register but does not belong there.  It only appeared after she had me hit the resolve button.

@Lisa2112 

I understand none of these are real transactions.  That is why they need to be reversed.  These things happen all the time and can be easily corrected with reversing entries.  The reason they happened isn't really important.  It's important to get it fixed. 

OK, if the only transaction that appears in your bank account register is the 4-7-21 payment of $845.44, that needs to be reversed with a deposit to your bank account that is assigned to the same 'Federal PR Txs Payable (941)' liability account.  I just assumed one of those refunds (either 7-8 or 12-1) would do that.  That's why my previous post suggested creating another check to offset the second refund.  So, now we have two issues: (1) where are the two refunds posted? and, (2) how do we fix this?.

1) To determine where the refunds posted, you need to find the transactions in QB.  You can use the global search (magnifying glass in upper-right) and type "845.44".  That should find all three transactions. Click on the payroll refunds.  Where is the refund posting to?  Undeposited funds or ???  To get them to show in your bank register, reassign the deposit account to your bank account. 

2) To fix this, create the check from my previous post and all 4 transactions should show in your bank register and can be cancelled against each other when you reconcile. 

Again, don't worry that these aren't real transactions.  The reversing entries will take care of that.  

I am supplying you with a pdf.  The refunds appear nowhere in my banking.  Only the unreconciled payment.

@Lisa2112 

If the only transaction showing in your bank account register is the unreconciled payment, then I would create a deposit to your bank account, dated 4-7-21, for $845.44 and assign the Federal PR Txs Payable (941) liability account to the deposit.  That will create the offsetting entry for the payment.  That should allow you to clear the transactions and reconcile your bank account. 

I would also look at your chart of accounts (COA) under the Federal PR Txs Payable (941) liability account and confirm that the two refunds are non-posting transactions.  You mentioned in your pdf that they are listed in your COA.  That's concerning.  If they are listed in your Federal PR Txs Payable (941) liability account register, click on them.  What comes up?  Can you run a Transaction journal on them (More > Transaction journal )?  Do you see the two refunds on your balance sheet (click the balance next to Federal PR Txs Payable (941) liability account to confirm)?  If they are not included in the Federal PR Txs Payable (941) liability account balance on your balance sheet, then the refunds should not be affecting your financial statements. 

I can't express my gratitude enough to you for your assistance.  This morning I did all you said and I indeed can go to the balance sheet and also go to the liability account and see these as posting transactions.

Here's the issue.  Intuit handles all the payroll tax payments for us.  All payments are made electronically by Intuit when I run payroll.  This situation is an issue that was caused by the switchover and I don't see this as having anything to do with an underpayment of taxes.  Essentially a shortage of a payment for $845.44 was created when the switch occurred although there was no true shortage.  This was not something I could view.  But, that error message kept coming up that there were some taxes due prior to my use of the system.  Repeated calls (and I mean repeated) to QBO netted the result of "there's nothing for you to be concerned about, everything is all paid and you are all set" which, as previously stated when I go to the tax payment page and it shows the "We've got you covered".  Nothing was off in my banking.  

Until late November when I called and whoever I happened to get in support actually brought what I couldn't see behind the scenes to the forefront.  All of a sudden on the front end I could see the $845.44 tax due and then another line item that had a resolve button.  She kept asking if I paid it (I know, I am repeating myself here).  She told me to hit resolve and that's when the transaction appeared in my banking as an unreconciled line item.  This tax does not need to be paid.

I can see all three line items in the liability account, the unreconciled payment and the two refunds.  When I try to click through it will not allow me access to the transaction.  This is because QBO handles the payroll taxes so there's very little I can do with any payroll transactions.  I just need to do whatever it is to get the unreconciled transaction off my books.  Will creating the deposit you mentioned take care of this and not throw off my banking?

@Lisa2112 

"I can see all three line items in the liability account, the unreconciled payment and the two refunds. When I try to click through it will not allow me access to the transaction."

Go to your chart of accounts and find the refund transactions in the liability register.  What ACCOUNT is listed under PAYEE for each of the refunds or does it show '-Split-'?  And, just to confirm, the ACCOUNT that is listed under the payment is your bank account, correct?       

Hi Rainflurry, the day went mad with the holiday coming and I expect no return reply until next week, I truly appreciate the help you've given me already.

I am attaching another pdf.

The top snip shows that I find the payroll refunds showing in the asset register in the COA.  Also noting our tax lawyer did an offset entry at the end of 2021 to clear them.  Then, wonderful me added the one on 12/1 with my clicking of the resolve button.

Below that is the journal entry.

I then show the payment as it appears in the banking register and the liability register so you can see the accounts.  So, the account that's listed under the payment in the banking register is not the bank.  Yet, it is in the liability register.  Does that make sense? 

Rainflurry, best Christmas present everrrrrrrrr!!!!!!!!  Thank you so much, that did the trick.  I appreciate all the help you gave so I could arrive at the solution.

I hope you have a wonderful holiday!!

Lisa