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Intuit

Resolving a tax overpayment

Learn how to handle a tax overpayment.

Do you need to resolve a tax overpayment? We explain what you can and can't resolve, and how to best resolve the issue.

For more information about underpayment, check out resolve a tax underpayment.

Overpayments: Which can you resolve

Note: Run your final payroll of the liability period first before resolving an overpayment. Additional payrolls may increase your tax liabilities for the period.

You can resolve these types of overpayment yourself:

  • All federal overpayments (940, 941, and 944)
  • State unemployment insurance (SUI) overpayments
  • SIT overpayment for some states

You will need help in resolving these overpayments:

Contact us and connect with a payroll expert to help you resolve these overpayments.

  • Specialized tax overpayments, including state disability insurance (SDI)
  • Workers' compensation (WC)

How to resolve overpayment

With Online Payroll, you can resolve the overpayment to make your reports and tax forms correct. Here's how you can resolve the overpayment:

  1. Go to Taxes, then Payroll Tax.
  2. Select Pay Taxes to check the overpayment. Overpayments appear as negative amounts.
  3. Select Resolve overpayment next to the negative amount. It will show you the breakdown of the taxes.
  4. Select if applicable:
    • Apply to a future tax payment  (recommended): Your overpayment will be applied to the next liability period.
    • Request a refund - Select this option if you prefer to get a refund. Note that you still need to contact the IRS or state agency to get the actual refund.
  5. Select Mark as Resolved.
  6. A message that we have updated your payroll info and to contact tax agency for next steps will appear. Select Contact tax agency for next steps to complete the task.
  1. Go to Taxes & Forms.
  2. In the Taxes section, select Pay Taxes to check the overpayment. Overpayments appear as negative amounts.
  3. Select Resolve Overpayment next to the negative amount. It will show you the breakdown of the taxes.
  4. If applicable, you can select:
    1. Refund - Select this option if you prefer to get a refund. Note that you still need to contact the IRS or state agency to get the actual refund.
    2. Apply to Next Period - Your overpayment will be applied to the next liability period.
  5. Select Save.
 Things to know
  • Telling us what you'll do with the amount you overpaid helps us keep your payroll and tax information accurate.
  • Resolving an overpayment in Online Payroll doesn't actually send a request to the tax agency for a refund or to have the overpayment applied forward. It only records whether you are going to receive a refund or have the amounts applied forward so that the tax amount owed in your payroll account is reconciled.
  • In some cases, the overpayment will be shown on the tax forms you filed. In other cases, you'll need to contact the tax agency to actually get a refund or have the overpaid amount applied to the next tax period.
  • Sometimes a future-dated tax payment is associated with an overpayment. In that case, you may be able to delete the pending payment. You'll then have to recreate it for the correct amount. In other cases, the tax payment is already "locked in." You'll need to resolve the overpayment.
  • Whether you choose to apply the overpayment to the next liability period or get a refund, contact  the IRS or your state agency for guidance.

 

Still have questions? Check the FAQ below:

  • One or more paychecks were deleted after a tax payment was made.
  • You've updated your rate to a lower one.
  • There was a duplicate payment made.
  • A historical tax payment was incorrectly entered.

  • A negative entry shows up on the Pay Taxes page in your payroll account.
  • When attempting to file a form, you will receive a prompt about the overpayment.
  • If the IRS or your state agency sends you a credit notice.

  • You won't receive the credit that's owed to you.
  • In most cases, our system won't allow you to generate a form if there's a tax overpayment associated with the form.
  • Our system won't allow you to pay FUTA if SUI overpayments or underpayments are present in your account.

Not all tax overpayments are valid. The following are examples of actions that can lead to invalid overpayments:

  • Incorrectly entered tax rate.
  • Incorrect liability period on a tax payment.
  • Incorrectly recorded historical tax payment.

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