Let's go over the steps on how you can properly record a payroll liability refund check.
First thing I'd suggest is to run the Payroll Liability Balances report.
Go to Employees.
Select Employees & Payroll. then select Payroll Liability Balances.
If there are credits, proceed to the steps on how to enter a payroll liability refund check.
If there are no credits, create a manual bank deposit. And post it to Payroll Expense.
How to enter a payroll liability refund check:
Go to the Employees menu, then select Payroll Taxes and Liabilities. Then select Deposit Refund Liabilities.
Select the name of the vendor who submitted this refund check.
In the Refund Date field, enter the deposit date.
In the For Period Beginning field, enter the first day of the pay period that the refund affects.
Choose between the 3 options how you want QuickBooks to handle the deposit.
In the Taxes and Liabilities section, select the payroll item/s affected by the refund.
In the corresponding Amount column, enter the positive amount.
For other situations you might have with recording a payroll liability refund check, take some time to view this article: Record a payroll liability refund check. It shows the steps for when the taxing agency has withheld a portion of the refund for a different balance due, as well as an interest paid to you on the check.
If ever you need further assistance, let me know by posting it in the comments below. I'll be sure to get back to you.
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