Hello, Samantha.
I'll share some details on how to handle this situation.
When you overpaid the payroll liabilities, the balance becomes negative. To correct the liability balance, you can create a payroll liability refund check, which increases the account's balance.
Since journal entries were recorded, you have the option to delete them. Before doing so, please consult with your accountant for advice. Then, create a back up copy of your QuickBooks Desktop company file.
Once done, let's run a Payroll Liabilities Balance report. Then, check for credits (amounts with negative values) that match the amount of refund and the tax item.
If there are credits, you can follow these steps to enter a payroll liability refund check:
- Go to Employees > Payroll Taxes and Liabilities > Deposit Refund Liabilities.
- Select the name of the vendor who submitted 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:
- In the Taxes and Liabilities section, select the payroll item/s affected by the refund.
- In the corresponding Amount column, enter the positive amount.
- (Optional) Enter a note in the memo field.
- Hit Ok.
On the other hand, if there are no credit, you can do a regular (manual) bank deposit and post it to Payroll Expense.
For reference on the steps above. please check out this article: Record a payroll liability refund check.
Please let me know if you have additional questions regarding the steps or need help with other concerns. I'll be right here to help you out. Stay safe!
