I have figured it out! 

Background: I have the same issue, a customer disputed a charge on accident. They then later paid me.

I had two payments and one invoice. This has been resolved by creating a new invoice for the the payment and then deleting the old invoice.

The tricky part is getting past the "This transaction has been deposited. If you want to change or delete it, you must edit the deposit it appears on and remove it first."

Here is how to delete the deposit:

I have figured it out! 

Background: I have the same issue, a customer disputed a charge on accident. They then later paid me.

I had two payments and one invoice. This has been resolved by creating a new invoice for the the payment and then deleting the old invoice.

The tricky part is getting past the "This transaction has been deposited. If you want to change or delete it, you must edit the deposit it appears on and remove it first."

Here is how to delete the deposit:

My last post was incorrect. You do not need to do the entire middle section. 

Simply jump to the section labeled "How to delete the deposit"

Sorry for the extras!

Thanks for joining the thread, Mason.

I truly appreciate the time and effort you’ve taken to provide detailed information about the fix that worked for you. Your thorough explanation serves as a valuable reference for other users who may encounter the same problem. By sharing your experience, you’re contributing to a supportive community and assisting others in resolving similar concerns more efficiently.

If you have questions about handling payments in QuickBooks Online, you're always welcome to post a comment below, Mason. I'd be glad to respond promptly. 

What about bank fees added to the rejected payment?  It doesn’t match the original payment and invoice owed because of the added fees. 

This is an old post but I just had the same issue and couldn't find a complete answer on the post. I spent two hours with support telling me to do contradicting things, or things that just flat out didn't work. I could not delete the entire deposit because a customer paid 4 invoices and only two were returned. This is what I did that finally worked. 

1. Go to Sales > Customers > Select Customer and scroll down the transaction list until you find the payment that was returned.

2. Click on the payment and then click "Edit"

3. Uncheck the invoice the payment was applied to. Click Record & Close - a box will pop up asking if you want to apply it as a credit. Click Save as a Credit.

4. Now go to banking transactions and find the debit/withdrawal for the returned payment in your bank account. Record the transaction type as an Expense. Enter the customer name in the paid to/from. Make the category your A/R account, and Post.

5. Go back to the payment transaction - Sales > Customers > Select Customer and scroll down the transaction list until you find the payment that was returned. Click Edit. Check the checkbox next to the Expense you just posted. Click Record & Close.

This should show reopen the invoices and remove the "needs attention."

6. If you charged a fee for the returned payment, you can either:

- Go to Products & Services > New Product/Service > Service. Name the service "Bank Fees" assign your "bank charges & fees" expense account as the income account and save. Then return to the invoice you just reopened and add a line item for the returned payment fee you charged. Save and close.

- Or you can add an adjustment when you receive payment.

If the invoice has since been paid by another method such as wire/ACH/check and you are ready to receive payment:

7. Click +New > Receive Payment. Select the customer name, fill out payment method, Deposit to Undeposited Funds, and check the invoice that you just reopened. Adjust for the fee you charged if applicable and you did not add it directly to the invoice. Save the payment.

8. Now go back to bank transactions and a match to the payment you just created should appear with the deposit in your bank feed. Click "Match" and you're done!