Learn how to clear both balances in your Payroll Service Customer Asset account and Payroll Liability Report in QuickBooks if they match.
You’d need to verify if you have any pending payroll to be sent before completing the following steps.
Step 1. Create a refund deposit for taxes and liabilities
- Go to the Employees menu, select Payroll Taxes and Liabilities, then Deposit Refund Liabilities.
- In the Refund Deposit for Taxes and Liabilities window, complete the following fields:
- Vendor. Select QuickBooks Desktop Payroll or Intuit Payroll Service.
- Refund Date. Enter the date the money was applied to payroll. This can be found on the liability check in QuickBooks Desktop that has the credit on it. You can find this check from the Payroll Service Customer Asset account by double-clicking on the credit amount.
- Period Beginning Date. Enter the last day of the quarter the credit affects, unless the credit is for the current quarter then enter today’s date.
- Group with other undeposited funds. This puts the amount in a holding account, so later you can enter a deposit of multiple items to apply the credit. Note: You’ll use the Make Deposit feature in a future step.
- Taxes and Liabilities
- Select the Item Name drop-down, then select the first payroll item that this credit affects. You may refer to the Liability Balance Report.
- In the Amount column, enter the appropriate positive amount. If the credit affects more than one item, be sure to enter only the amount that applies to the item.
- In the Memo field, enter “Moved to the Payroll Service Customer Asset account to clear Liability Balance Report”. This entry appears on payroll reports that include this transaction. If more than one payroll item is affected by the credit, use the Tab key to move to the next line, and enter the next item and amount.
- Select OK.
|Note: If you’re using Basic, Standard, and Enhanced, the process is complete. If you have Assisted, you may proceed to Step 2.
Step 2. Clear the accounts
- Go to Banking, then Make Deposits.
- Select the deposit just entered on the Payments to Deposit window that pops up.
- Select OK.
- In the Make Deposits window, complete the following fields:
- Deposit To. Select the bank account where your payroll gets posted to.
- Date. Change the date to the day the money was applied to payroll. This date can be found on the liability check in QuickBooks Desktop. You can find this check from the Payroll Service Customer Asset account by double-clicking on the credit amount. Note: The deposit you previously entered should be the first line on the Make Deposit window. Don’t change this line.
- Received From. In the second line, select QuickBooks Payroll Service or Intuit Payroll Service from the Vendor List. We are not altering the first line but creating a new line of data.
- From Account. Select Payroll Service Customer Asset.
- Memo. Enter Clearing Accounts.
- Amount. Enter the same amount entered previously as a negative numb
- Deposit Total. Confirm the total is a zero dollar amount.
- Select Save & Close.
- Verify the balances in the Payroll Service Customer Asset account and Payroll Liability Balances report.
Step 3. Send payroll data
- Go to Employees, then Send Payroll Data.
- The Send/Receive Data window will open. In this window, you will see Tax Adjustments and possibly Funds to be Withdrawn for the amount of Deposit Refund of Taxes and Liabilities you just entered. This is an expected result from QuickBooks Desktop and when sent, the funds will not be withdrawn.
- Send a zero payroll. Do not send this with a payroll, as an error message may be generated.
You may also check Record a payroll liability refund check for more info.