Learn how a liability overpayment can be applied as a credit.
Do you have a liability overpayment? If so, you can apply it as a credit to a payroll tax account. We show you how.
Before applying a tax credit, talk to your accountant. Find out which account to select so the credit is correctly applied in your tax forms.
To apply a tax credit follow these steps.
- Create a liability check.
- Select the Expenses tab. And select the account where you want to apply the credit.
- Enter the amount of the credit (only up to the amount of the check) as a negative figure in the Amount field.
- Enter an explanation of the transaction in the memo field.
- Select the Recalculate button to lower the amount of the check by the amount of the credit. If there is a credit balance remaining, you can apply it to the next period by repeating steps 1 through 4.