Sales Tax Overpayment in QuickBooks Desktop w/Credit Issued

Hi, WeldWright. I'll help share insights on how QuickBooks Desktop handles sales tax overpayment.

Based on your scenario, you are correct in stating to create a sales tax adjustment. By making sales tax adjustments, you will transfer funds into or out of your Sales Tax Liability account.

Before the process, please consult with your accountant to confirm this procedure and guide you in choosing the proper account to ensure your books are accurate.

Here's how:

1. From the Vendors menu, select Sales Tax, then Adjust Sales Tax Due.
2. Enter the Adjustment Date, Sales Tax Vendor, Adjustment Account, and other relevant information in the Sales Tax Adjustment window.  
3. In the Adjustment section, choose if you need to increase or reduce sales tax, then enter the adjustment amount.
4. Enter additional info in the Memo field if applicable.
5. Click OK.

For more details, check this article: Process sales tax adjustment.

Additionally, I would like to provide you with a resource to assist you in accurately closing out the current period: Learn the reconcile workflow in QuickBooks.

The Community is always here to help if you need further assistance handling sales tax overpayment or other related issues. 

Ok, thank you for the quick response. I created an Adjustment Account as income and named it Sales Tax Overpayment/Credit and then made the adjustment reducing the Sales Tax by the amount of the extra payment ($233.54). Next, should I record the extra payment in the usual manner, i.e., Click Vendors>Sales Tax>Pay Sales Tax, enter the dates for the next tax period, and enter the amount of the extra payment? When I open Pay Sales Tax, there are now two lines: one for the sales tax, the other for the adjustment. Do I need to check the item that shows the negative adjustment or leave it unchecked (see attachment). BTW, I have not yet reconciled the bank account for that period, so there is no need to make any adjustments to that. I just need to record the payment.

Thank you for reaching out and providing an update on the progress you have made so far, @WeldWright. I want to assure you that I am here to assist you further and address any concerns or questions you may have. It is important to me that we accurately document the sales tax payment you made.

First off, I want to acknowledge and commend your efforts in creating an adjustment account for the overpayment of sales tax and reducing the sales tax by the corresponding amount. By working together, we can overcome any challenges that may arise.

To resolve this matter, yes, you can record the payment on the Pay Sales Tax page using the current tax period. On the first line, both the AMT DUE and AMT PAID fields should reflect the exact amount of 19.92. On the second line, you will need to enter the total amount you paid. This will allow QuickBooks Desktop to deduct the AMT DUE from the payment you made and carry forward any remaining credits to the next tax period. To help you visualize this process, I have included a sample screenshot for your reference:

Furthermore, I'd like to provide you with an additional resource that could prove to be immensely helpful in the event that you come across any challenges or difficulties while dealing with your sales tax obligations: How to resolve common sales tax issues in QuickBooks Desktop. This offers comprehensive guidance and practical solutions for addressing and resolving various sales tax management problems.

The Community Team always has your back, making sure that you'll complete your business-related activities. Please don't hesitate to leave a comment below if you have further questions about handling sales tax overpayment in QuickBooks Desktop. We'll surely get back to you. Have a great rest of your day and stay safe.

I followed these steps, however, it did not solve the problem. In my original question, the problem was that when I amended the return for the last quarter, instead of debiting the amended amount only from my checking account, the State debited the original amount ($233.54) AND the amended amount ($270.92). [From original question: "My checking account was debited both amounts, but only one actually applies to the second quarter. Since this resulted in an overpayment, the state issued a credit. This credit will not be refunded, but will apply to the next payment(s)."]  So, the bank statement shows both debits for the Sales Tax, but my QB register shows only the amended amount. I have entered the credit of $233.54 as instructed. But following the steps provided of entering a payment does not create an additional transaction in the check register. After entering the payment as instructed, I got a message that said, "Your existing credit with SCDR (Sales Tax) is sufficient to pay your sales tax due. A check will not be written to this vendor." Since I still do not have a check for the original amount in the register,  I cannot reconcile the checking account. If I simply click "Write Checks" and try to enter a check manually, I get a message that says, "The vendor you chose could be a sales tax agency. If you're trying to pay sales tax, you should used the Pay Sales Tax window instead. Recording this check transaction will not be considered a payment against any sales tax owed." So, how do I get the extra amount in the register as a Tax Payment? Do I need to delete the adjustment and enter the extra payment and then reenter the adjustment? Or do I need to delete the one sales tax check in the register now, as well as the adjustment, and then start all over? I could enter the two amounts as a payment, and then go back and reenter the credit/adjustment.

Thanks for following up with the Community, WeldWright.

To properly identify what you can do to get your extra amount in the register to appear as a tax payment, I'd recommend working with a tax professional. If you're in need of one, there's an awesome tool on our website called Find a ProAdvisor. All ProAdvisors listed there are QuickBooks-certified and able to provide helpful insights for driving your business's success.

Here's how it works:

1. Go to our Find a ProAdvisor page.
2. Use the City or ZIP search field to specify a location.
3. Select Find a ProAdvisor.
4. Browse through your results and find one that works best for the business. You can click on each ProAdvisor's profile to learn more information about them.
   
   

Once you've found an accountant, they can be contacted through their Send a message form:
 

1. Use the available text box to introduce yourself. Be sure to include details about which services you're looking for.
   
   
    
2. Enter your appropriate info in the Your name, Your email, and Your phone number (optional) fields.
   
   
    
3. Select Send message.
   
   

You'll also be able to find many detailed resources about using QuickBooks in our help article archives.

If there's any additional questions, I'm just a post away. Have an awesome Monday!