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:
Things to know
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.