Correcting overcollection of taxes

Thanks for posting your concern in the community, michellejolly.

I have here a few steps to help you manage your transactions in QuickBooks Desktop.  

Since the refund has already been processed, you can record the payment to make sure that all the transactions are up to date. I'll be glad to show you how.

1. From the QuickBooks Home page or the Customers menu, select Receive Payment.
2. In the Received From drop-down, select the customer's name.
3. Enter the Amount received.
4. Make sure the date is correct, then choose the Payment method.
5. Select the invoice or invoices you'd like to pay.
6. To add a discount or credit, select Discounts and Credits.
7. Select Save & Close.

Moving forward, make sure to create a check instead of credit memo when processing a refund. This is to avoid an available credit.

To learn more about how to record a payment, you can check out this article: Record an invoice payment

I'll also be adding this article as a reference: Automatically record QuickBooks Payments bank deposits

If there's anything else you need with your QuickBooks account, please let me know. I'm always here to help. Take care!

This doesn't resolve the issue. Invoices were generated over multiple years with an extra tax that should not have been collected. All invoices were paid by customer, so essentially they overpaid. All invoices have been corrected in Quickbooks with the appropriate tax thus leaving a credit balance on the invoice. A check totaling the entire tax amount overcharged was generated and sent to client. This resolves the amount due on their account. The only issue is that all the invoices that were corrected now show open balances on the Open Invoice Report. This is what I don't know how to resolve. 

One additional comment . . . I need to know how to tie all the "open credits" to the check written to refund the customer.

I can provide information on how we handle customer refunds, michellejolly.

Whenever you edit a paid invoice into a smaller amount, the Recieve Payment window will show an overpayment. You have the option there to refund the amount to the customer. Looks like you created a Check and entered the lumpsum overpayment, just make sure that you selected the Accounts Receivable (A/R) account in the Expense field and make it billable to the customer. Once done, link the check you created to the credits to zero out the customer balances. 

You can follow the screenshots below for your reference. 

For more details in handling customer refunds, just click here. 

Let me know if you have other questions. Take care!

Thank you. I did create the check as specified in your response. When I open the Customer Payment window and select "REFUND THE AMOUNT TO THE CUSTOMER" in the "OVERPAYMENT" section then click on "Apply Credits" link, I run into 2 issues:

1)  The credit amounts in the "CREDIT AMT." column don't match the overpayment amounts and

2)  If I enter the correct amount of the credit in the "AMT. TO USE" column and apply, the overpayment amount on the Customer Payment doubles rather than zeroing out. 

What am I missing?

Thanks so much!

Thanks for getting back to us, michellejolly. 

If the overpayment check is higher than the credit balance, you need to edit this check. The Accounts Receivable and the credit balance should have the same amount. Then, you can add other expenses for the excess amount. 

However, if the overpayment is smaller compared to the credit, you can choose one of the following. 

• Retain as an available credit. QuickBooks enters a negative amount in your Accounts Receivable (A/R) register for the credit memo. You can use this credit as payment for another transaction. If you chose to retain as available credit, you'll see the available credits in the customer payment window.
• Give a refund. You can issue the refund in cash or a check. If your customer used a credit card, learn how to refund a credit card payment.
• Apply to an invoice. QuickBooks opens the Apply Credit to Invoices window. Select an invoice you want to apply this credit to.

Please keep in touch if there's anything else I can do to help you succeed with QuickBooks. I've got your back. Have a great day.

A lump sum refund has already been issued to the client. I need to have all the credits somehow connected to the check so that they are resolved and no longer show as open. 

Good morning, @michellejolly. 

I appreciate you coming back here and letting us know some additional information. 

Since you're still having issues with correcting these details and resolving the open transactions, then I recommend reaching out to our support team. They'll be able to take a further look at your account to see what steps you need to take to fix this problem. Here's how: 

1. Go to the Help menu. 
2. Choose QuickBooks Desktop Help. 
3. Tap the Contact Us hyperlink. 
4. Give a brief description of the issue and hit Let's Talk. 
5. Scroll down and select to Get a callback. 

It's that simple!

Let me know how the phone call goes. I want to make sure that you're able to get back on track. I'm only a post away if you need me. Have a great day!