Learn how to deal with a tax refund check for payroll in QuickBooks Desktop Payroll.
If you received a refund check from a tax agency, you may have overpaid payroll taxes. You’ll want to check your payroll liability balance report and then create a payroll liability deposit to record this in QuickBooks so your taxes are accurate.
If you use QuickBooks Desktop Payroll Assisted and your refund is from a period before you used our payroll service, you’ll need to enter the refund check as a deposit to your bank account. Don’t use the instructions below.
Step 1: Find the matching refund amount in QuickBooks
- Create a payroll liabilities balance report. Look for the amount that matches the refund check amount.
- If you find an amount that matches, proceed to step 2.
- If you don’t find an amount that matches: review the refund notice. The check may include interest, or some of your refunds may have been applied to past-due taxes.
Step 2: Enter your payroll liability refund check
- Go to Employees, and select Payroll Taxes and Liabilities.
- Select Deposit Refund Liabilities.
- In the vendor dropdown, select the agency that sent the refund check.
- In the Refund Date field, enter the deposit date.
- In the For Period Beginning field, enter the first day of the pay period that the refund affects.
- Select how you want QuickBooks to handle the deposit:
- Group with other undeposited funds: adds the amount in a holding account. This option requires you to use Make/Record Deposit to complete the process.
- Deposit To: Record the amount to the account of your choice.
- In the Taxes and Liabilities section, select the payroll items affected by the refund.
- In the Amount column, enter the positive amount.
- Select OK.
- If you use QuickBooks Desktop Payroll Basic, Standard, or Enhanced for US or Canada, the process is complete.
- If you use QuickBooks Desktop Payroll Assisted:
- Select Employees, then Send Payroll Data.
- In the Send/Receive Data window, you’ll see Tax Adjustments and funds to be withdrawn. We won’t debit the amount.
- Select Send to Intuit.