How To Record A Payroll Liability Refund Check In QuickBooks?

In this article, we will be helping you out to record a payroll liability refund check.

Record A Payroll Liability Refund

The liability balance turns into negative when payroll liabilities are overpaid. This can be corrected by creating a payroll liability refund. Doing this will increase the liability balance.

Run A Balance Report

Before you go to the process, you need to create a Payroll Liabilities Balance report. You need to check out the credits (amounts with negative values) which is equal to the refund amount and the tax item.

  • If there are credits, perform the steps to enter a payroll liability refund check.
  • If there are no credits, perform a regular or manual bank deposit and post it into the Payroll Expense.
  • Assisted Payroll: If the refund is of a duration before you started using Assisted Payroll, or the liability balance is not showing up as negative, you have to provide the refund check in a form of deposit to your bank account.

Enter A Payroll Liability Check

  • Go to the Employees menu and choose Payroll Taxes and Liabilities > Deposit Refund Liabilities.
  • Choose the vendor’s name who submitted the refund check.
  • Provide the deposit date in the Refund Date
  • Under the For Period Beginning section, provide the first day of period that the refund affects.
  • Choose the way you want QuickBooks to manage the deposit:
    • Group with other Undeposited funds: It adds the amount in a holding account. It also allows you to enter a deposit with multiple items. For this option, you need to use Make/Record Deposit to finish the process.
    • Deposit To: It allows you to record the amount to the account of your preference.
  • On the Taxes and Liabilities section, choose the payroll item/s that have an impact by the refund.
  • Provide the positive amount in the Amount
  • (Optional) Enter a note in the memo field.
  • Click on OK.
  • For Basic, Standard, or Enhanced Payroll users in the US region, the process is already finished.
  • For Assisted Payroll users:
    • From the main menu, go to Employees > Send Payroll Data.
    • On the Send/Receive Data window, locate Tax Adjustments and Funds to be Withdrawn for the Deposit Refund amount of taxes you mentioned. When it is sent to you, the funds won’t be withdrawn.
    • Process a payroll with zero amount. While the payroll liabilities are overpaid, the liability balance will be shown as negative. When you refund this deposit, it will increase the liability balance and it will become zero again.

If the taxing agency withheld a portion of the refund for a separate balance due:

  • Perform above steps properly. (Provide the full tax amount refund on the Deposit total section.)
  • Provide a liability adjustment in the account for the portion that was withheld to reduce the liability.

If interest was paid to you on the check…

Don’t add the amount in Deposit Refund of Liabilities of Liabilities. For this you need to follow the below-mentioned steps:

  • Perform steps 1 to 5.
  • Select Group the deposit with Undeposited funds.
  • Go to the Deposit total field, provide the amount of negative refund of interest paid.
  • Now, perform steps 7 to 9.
  • Make a Deposit for the interest and insert amount under the Undeposited Funds. Doing this will let you make a deposit with both payroll liabilities and added interest.

Technical Support For QuickBooks Desktop

The provided solutions will allow you to Record A Payroll Liability Refund Check in QuickBooks Desktop. However, there can be some complexities that you can face while recording a payroll liability refund check. In such cases, you can face several errors and issues as well. If you also face any issue, you need to connect with the support department of Intuit by dialing our toll-free QuickBooks Support Phone Number +1888-382-7559 to get instant QuickBooks support.