How do you process the refund check for a 941 quarterly refund in QBO and QBO Online Payroll?

Chelles45 · ‎February 28, 2024

I received a 941 Quarterly Refund for Q2 2023 in the form of a check, which I deposited into my checking account.

The refund transaction was recorded in my chart of accounts: Payroll Liabilites: Other Current Liabilities account.

I called QBO today to ask how the bank deposit needed to be entered so it was categorized correctly. They had me choose the Payroll Liabilities account, which increased my liability account, so then they had me enter a JE to move the amount from Payroll Liabilities into my Checking Account.

I don't think that is right.

Should this be handled in JE in QBO?

What is the best practice of managing this?

How do I get the transaction off my reconciliation screen?

Teri · ‎March 22, 2024

Every accounting transaction requires entry to at least two accounts. One debit and one credit. When you receive Cash that is always a debit to Cash/Bank account so credit depends on what it was for. Tax refunds go to account where expensed originally to reduce that expense. If you knew it was coming, may have already been recorded in Taxes Receivable asset account and if so, then you would credit that account to zero out.

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How do you process the refund check for a 941 quarterly refund in QBO and QBO Online Payroll?

How do you process the refund check for a 941 quarterly refund in QBO and QBO Online Payroll?

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