How to apply a credit for Payroll Taxes

Let's make sure that the tax credit is recorded properly and use it to zero out the remaining balances, dal1cas2.

The payroll system has its own mapping in QBO. This is why the taxes are not zeroed out since the credit that you made is on the vendor side of the program.

Follow these steps on how to delete the vendor credit:

1. Open the refund or vendor credit.
2. Click More at the bottom and select Delete.
3. Select Yes to confirm that you want to delete it.

Once done, use these steps on how to record and apply the credit to your outstanding payroll liabilities:

1. Go to the Taxes menu, then select Payroll Tax.
2. Click Payments.
3. Look for Resolve overpayment. If you don’t see this option, contact us so one our payroll agents can apply the overpayment.
4. Click Apply to a future tax payment, then select Mark as Resolved.
5. Select X to close the window.

Additional references about payroll tax payments are also provided here in case you might need them:

• Resolve a Payroll Tax Underpayment 
• Send in Your Payroll Tax Notice 

Don't hesitate to always come by and post questions in the forum if you still need help. We're here to guide you through all the time.

Hi dal1cas,

Hope you’re doing great. I wanted to see how everything is going about recording the payroll tax credit. Was it resolved? Do you need any additional help or clarification? If you do, just let me know. I’d be happy to help you at anytime.

Looking forward to your reply. Have a pleasant day ahead!

Unfortunately this did not resolve my issue as we do not do our payroll through quickbooks and the link for "payroll Tax" does not appear on our menu. Our Payroll taxes are automatically deducted from our employee's paychecks and paid directly through our payroll provider.

Thanks for clarifying your concern, dal1cas2. I'm here to help ensure you're able to apply a credit for Payroll Taxes.

Since you're using QuickBooks Online for accounting and use a third-party payroll. To apply a credit, you can create a Journal Entry for manual recording for payroll.

 Here's how:

1. Pick your employees in payroll report.
2. Tap + New.
3. Hit Journal Entry.
4. Under the Journal date, provide the paycheck date.
5. Enter the Journal no. field.

You can also consult an accountant to help you check and make sure each posting account for your journal entries are correct. 

You can learn more from this article: Manually enter payroll paychecks in QuickBooks Online.

You'll want to prepare and print your form 941, feel free to check out this article: Learn how to prepare and print Form 941, Schedule B, and Form 940.

Let me know if you still have questions or clarifications about payroll. I'll be here to help. Keep safe!

I know how to apply the payroll info into QBs, what i don't know is how to apply the credit for the payroll taxes so that it amounts to $0

Hello dal1cas2!

I see that my colleagues have provided information about recording a tax overpayment and doing manual adjustments outside of the Payroll. However, it’s hard to provide further steps without looking at your records, so I recommend contacting our QBO Support. This way, they can start a screen-sharing session and help you with the tax credit.

Steps to contact our support team:

1. Go to Help (?) and select Contact Us.
2. Enter a sentence to describe your concern, then select Let's talk.
3. Choose a way to connect:
   • Start a chat with a support expert.
   • Get a callback from the next available expert.

Support hours according to QBO plan:

• Plus, Essentials, Simple Start M-F 6 AM to 6 PM PT and Saturday 6 AM to 3 PM PT
• Advanced, any time, any day

If you need anything else, feel free to go back to this thread. The QuickBooks Team is always around to help.