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Community Contributor *

Tax Credit

I've received credit for a quarterly tax; is there a way to enter this as a credit for next quarters taxes?

11 Comments
Moderator

Re: Tax Credit

Hello there, @kskove.

 

Thank you for posting in the QuickBooks Community. I'd be happy to help share some information about how to enter the credit on the next quarter taxes.

 

If you're referring to a payroll tax refund, you have an option to apply this credit to the next quarterly taxes. If you've already paid the tax liability on the previous quarter, you need to enter first a prior tax payment so that it shows as an overpayment amount in QuickBooks.

 

When QuickBooks detects that you've overpaid your taxes, it'll give you the option to apply the overpayment to a future tax liability period.

 

Here's how to record the prior tax payment:

  1. On the left pane, select Taxes.
  2. Select Payroll Tax.
  3. Under Taxes, click Enter prior tax history.
  4. Click Add Payment.
  5. Select tax type and liability period.
  6. Enter the Payment Date, Check Number and Tax Item Amount.
  7. Click OK.

After that, apply a liability overpayment as a credit to payroll tax liabilities.

 

Here's how:

  1. On the left pane, select Taxes.
  2. Select Payroll Tax.
  3. Under Taxes, click Pay Taxes
  4. In the Pay Taxes page, find the tax name under TAX TYPE.
  5. An overpayment appears on that page as a negative amount.
  6. Click Resolve Overpayment.
  7. Select Apply to a future tax payment (recommended).
  8. Click Mark as Resolved.

Take note that some state agencies don't approve of applying the overpayment to a future tax liability. I'd suggest you contact your state's tax agency for verification.

 

For more details, I've attached some articles for your reference:

Feel free to drop a comment below if you have any other questions about applying a credit for the next quarter taxes. I'll be happy to help you further. Have a great day. 

Frequent Explorer *

Re: Tax Credit

How about with QuickBooks Desktop? I don't seem to have the same easy option.

Anonymous
Not applicable

Re: Tax Credit

Hello, chris6. 

 

I have here a helpful article that will walk you through on recording tax credit in the desktop version of QuickBooks: https://community.intuit.com/articles/1763418-apply-your-payroll-liability-overpayment-as-a-credit.

 

Please visit us again if you need anything else with QuickBooks. Have a great day!

Frequent Explorer *

Re: Tax Credit

How does this work with epayments?

QuickBooks Team

Re: Tax Credit

Hello there, @chris6.

 

Thanks for getting back to us and going through the answer given by my colleague, MikiD. Allow me to join in and help you more in electronically paying the taxes using the credit:

  1. Click Employees.
  2. Choose Payroll Center.
  3. Click the Pay Liabilities tab.
  4. Select the liability and click View/Pay.
  5. Go to the Expenses tab.
  6. Select the account where you want to apply the credit.
  7. Enter the amount of the credit (only up to the amount of the check) as a negative figure in the Amount field.
  8. Enter an explanation of the transaction in the memo field.
  9. Select the Recalculate button to lower the amount of the check by the amount of the credit. 
  10. Click E-pay.

 

That should help you epay the liability, chris6.

 

Please know that I'm still here to help you more if you have other payroll questions. Just drop a comment below or mention my name. Wishing you all the best!

Frequent Explorer *

Re: Tax Credit

Forgive me but I can't seem to understand this. I can't enter payroll items (Federal Withholding, SDI, FICA, etc.) in the expense side of the payments. Am I simply crediting back the payroll liabilities GL account on the expense side of the check?

Moderator

Re: Tax Credit

Hi there, @chris6.

 

Thanks for getting back to us. Allow me to chime in for a moment and help make sure that you can apply payroll liability overpayment as a credit in QuickBooks Desktop (QBDT).

 

As mentioned by my colleague @HoneyLynn_G, you need to enter/select a payroll tax account where you want to apply the credit instead of the payroll items. Once applied and you have a credit balance remaining, you can add it to the next period.

 

For your reference, you can also check out this article for further guidance: Apply your payroll liability overpayment as a credit.

 

That should answer your concern for today. Please let me know in the comment section if you have any follow-up questions. Take care and have a good one.

Frequent Explorer *

Re: Tax Credit

Thank you for your response, however, it did not help me. We are talking apples and oranges here. I was correct in crediting back accrued payroll liabilities.

Moderator

Re: Tax Credit

Hi @chris6,

 

You are correct that you will be crediting the Liability account as this will increase and offset the tax payment made previously.

 

As my colleague  @HoneyLynn_G provided, that is a Tax Liability payment transaction type but the tax credit is entered as negative value, this only means the Transaction Journal will be on the Credit side.

 

Feel free to let us know if you need further assistance.

 

Not applicable

Re: Tax Credit

I have a question related to resolving payroll tax overpayments.  We had 5 to clear out - 4 of them resolved and cleared out (per your instructions in this thread) but the other one is "stuck" in the "Pay Taxes" screen even though it's been resolved.  How do I get rid of this??  See attached screenshot.  There is no longer a "Resolve Overpayment" option and I can figure out no way of clearing it.  

 

 

 

 

QuickBooks Team

Re: Tax Credit

Hello there, mkolagirl.

 

I appreciate the screenshot you've provided. Let me share information about tax payments showing overdue in QuickBooks Online (QBO). 

 

This issue with Payroll Task showing overdue is an ongoing issue that our engineers are closely working on right now. 

 

For now, I'd suggest calling our Customer Care Team. I suggest giving us a quick call so we can add your company information to the list of affected users. This way, updates will be sent to you via email regarding the progress of the investigation.

 

Here's how you reach them:

  1. Sign in to your QuickBooks Online company.
  2. Click the Help icon in the upper right of the screen.
  3. Select Contact US on the pop-up. 
  4. Enter what you're needing assistance with in the How can we help? field and choose Continue
  5. Click Get a callback.
  6. Enter your contact information.
  7. Select Call me.

As soon as the fix has been released for this, we will communicate that in a resolution email.

 

For future reference, you might find this article helpful: Resolve a tax overpayment.

 

Please know that you're always welcome to post anytime you need help with payroll. I'm always here to help.

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