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Level 1

Tax Credit

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

20 Comments
Highlighted
Moderator

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. 

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Level 1

Tax Credit

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

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Anonymous
Not applicable

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!

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Level 1

Tax Credit

How does this work with epayments?

Highlighted
QuickBooks Team

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!

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Level 1

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?

Highlighted
Moderator

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.

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Level 1

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.

Highlighted
Moderator

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.

 

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Level 1

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.  

 

 

 

 

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QuickBooks Team

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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Level 2

Tax Credit

This works to eliminate the Liability payment, which was the first objective.  However, the Liability balances window is adjusted by the same amount.  Do I need to enter now a liability balance adjustment (without affecting accounts)?  Seems like a cumbersome way to just delete a liability payment that should never be there in the first place.  A/P balances are ok.

 

 

Highlighted
Content Leader

Tax Credit

It's nice to have you in the thread, @cericha. I'd be happy to lend a hand with this liability payment.

 

To help ensure that you receive the best assistance, could you please let me know which version of QuickBooks that you're using? This thread has discussions on a few different products, and I want to ensure that you get the right resolution. 

 

I'll be keeping an eye on this thread and look forward to assisting further. Take care. 
 

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Level 2

Tax Credit

Hello David,

 

Thanks for your response.  I am using Quickbooks Enterprise hosted locally.

 

The problem is due to a rate change in our state unemployment taxes that was issued by the state in mid Q2, but that was retroactive to the beginning of the year.  I entered the liability adjustments for Q1 and Q2.  Since our rate was higher when we paid Q1, they issued a credit. 

 

At the end of Q2 the system issued a Payroll Liability Check which is showing overdue in the Payroll Center Window.  Liability balances and A/P balances are all accurate.  However, Payroll center does not recognize the credit. 

 

Basically, I am looking for a way to get rid of the overdue check.  I have tried several ways including paying the check with an offsetting expense payment (making the check 0.00), but then the Payroll liabilities get out of wack.  If I try to issue a Payroll liability adjustment, then it puts the check back in the Payroll Center.

 

Your help will be greatly appreciated.

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Level 2

Tax Credit

Hi David,

 

Quickbooks enterprise locally hosted.

Highlighted
QuickBooks Team

Tax Credit

Thanks for letting me know that you're using the Enterprise version and sharing the on-point details about your concern, @cericha

 

Changing your State Unemployment Insurance (SUI) rate in the program automatically adjusts your liability amounts for Q1 and Q2. It could be the liabilities were paid outside QuickBooks but were not entered in the software, that's why the system doesn't recognize the credit.

 

I've got some steps to help you get rid of the overdue check from the Payroll Center window. This can be done by entering a prior tax payment for Q2 to mark it as paid. Then, choose Do not affect accounts since your liability balances and A/P balances are already accurate. Let me guide you how. 

  1. Go to Help from the top menu and select About QuickBooks Desktop Enterprise.
  2. On your keyboard, press Ctrl + Alt + Y to open the Setup YTD Amounts window.
  3. Choose Next until you reach the Enter prior payments section.
  4. Click Create Payment.
  5. Enter the Payment Date and For Period Ending date accordingly. 
  6. In the Taxes and Liabilities field, choose the SUI tax and then enter the amount.
  7. Click the Accounts Affected button.
  8. Choose Do not affect accounts, then click OK
  9. Click Done.
  10. Hit Finish to close the window.

 

The screenshot below shows you the fourth to eight steps. For more information, see the The Liabilities were paid but never entered into Desktop section through this article: Scheduled Liabilities Payroll Show As Overdue or In Red

EnterHistoricalPayments.PNG

 

January is one of the most important months for every business, just like yours. You can visit this website: Year-end Checklist. This link contains essential dates and tasks to help you start and complete the year-end payroll process. 

 

I'm just a post away if you need anything else. Have a good day, @cericha

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Level 2

Tax Credit

The problem with this solution is that my payroll liability balances are ok and this payment will actually reduce my liability balance.  The overpayment was made on Q1 through payroll center and as stated before, all balances are ok at the end of Q2 and Q3 - payables and the payroll liability balance both match.  Creating this payment will remove the overdue payment from my Payroll Center window, but will also affect (reduce) my liability balance.

 

Any other suggestions?

Highlighted
QuickBooks Team

Tax Credit

Hello, @cericha.

 

Since your liability balances are already accurate, it's possible that the payments for Q1-Q3 cover an incorrect period. Let's open those transactions and verify the dates affected. 

  1. From the Employees menu, select Payroll Center.
  2. Go to the Transactions tab and tap Liability Checks.
  3. Find the entry and open it. 
  4. Check the Period section and update it if necessary.
  5. Hit Save & Close.

liability 1.PNG liability 2.PNG liability 3.PNG

 

However, if all the checks are showing the right details, I recommend contacting our Payroll Team for further assistance. They can perform a screen-sharing session to see where the issue is coming from. 

 

Here's how to get in touch with our phone agents:

  1. Go to the Help menu at the top and select QuickBooks Desktop Help.
  2. Click the Contact Us link at the bottom of the pop-up window.
  3. Enter a brief description of your concern and hit Continue.
  4. Select the support option that works for you. 

I’m adding this article as your guide: Contact the QuickBooks desktop customer support team.


Please let me know how everything goes and if there's anything else you need. I'm here to keep helping. Have a good one!

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Level 2

Tax Credit

Kihm,

 

I reviewed the Q1 payment and the amount and time frame ( 1/1/19-3/31/19) was correct.  As pointed out before, the amount was higher than the current balance due to the liability adjustments that I did to adjust for the new tax rate.

 

However, I decided to open the time frame of the payment and I changed it to cover Q1-Q3 and that did the trick.  The balances are all accurate and the overdue payments are gone from the Payroll Center window.   I assume from this that QB does not apply your over payment unless you expressly tell it to apply that Q1 check to Q2 and Q3 by modifying the Period window.

 

Thanks a lot for your help and everybody else that contributed.  This community is great!!!!

 

Eduardo

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QuickBooks Team

Tax Credit

You're welcome, @cericha.

 

I'm glad that opening the time frame of the payment fixed the issue.

 

Let me add this article about applying an overpayment for future reference: Apply your payroll liability overpayment as a credit

 

Reach out to the Community again if you need anything else. I'm always here and ready to help. Have a fantastic day!

 

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