This article will help you to enter or record a payroll liability refund check manually. It is a common process but sometimes you can face some complexities as well. If you are not sure about performing the steps manually then you can contact the QuickBooks Payroll Support Phone Number +1888-396-0208 toll-free.

If payroll liabilities are overpaid, the liability balance will become negative and you have to correct the balance manually. For this, you need to create a payroll liability refund check, which increases the liability balance.

Run A Balance Report

Before you go to the steps, you need to create a Payroll Liabilities Balance Report first. Check for credits which is equal to the refund amount and the tax item.

  • If there are credits, you need to perform the steps to enter a payroll liability refund check.
  • If there are no credits, you need to perform a regular (manual) bank deposit and post it to Payroll Expense.
  • For Assisted Payroll Users: If the refund is for the date or period before using the Assisted payroll or the liability balance report doesn’t display as negative then you need to provide the refund check in a form of a deposit to your bank account.

Enter A Payroll Liability Check

  • Open QuickBooks and from the main menu of QuickBooks, go to Employees > Payroll Taxes and Liabilities.
  • Choose Deposit Refund Liabilities
  • Choose the vendor name which is submitted the refund check.
  • Enter the deposit date in the Refund Date
  • Provide the first day of the pay period that the refunds affect under the For Period Beginning
  • Choose the way want QuickBooks to manage the deposit:
    • Group with other Undeposited funds: Insert the amount in a holding account and allow you to provide a deposit with multiple items. To use this option, you should be using Make/Record Deposit to finish the process.
    • Deposit To: Records the amount to the account you have selected.
  • Choose the payroll item/s affected by the refund in the Taxes and Liabilities section.
  • Provide a positive amount in the corresponding Amount
  • (Optional) Create a note in the memo field.
  • Click on OK.
  • For Basic, Standard, or Enhanced Payroll US version, the process is complete.
  • If you have Assisted Payroll:
    • From the main menu of QuickBooks, go to Employees > Send Payroll Data.
    • You will get the Send/Receive Data window on your screen. This window will have Adjustments or Funds to Withdrawn for the Deposit Refund amount of Taxes and Liabilities you just provided. It is a highly usual result from QuickBooks and once it is sent, the funds won’t be withdrawn.
    • Send a zero payroll. Once the payroll liabilities are overpaid, the liability balance becomes negative. When you deposit the refund, it will have an impact of increasing the liability balance, bringing it back to zero.

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

  • Perform the above steps. (Provide the full amount of tax refund under the Deposit total field)
  • You need to enter a liability adjustment to reduce the liability to account for the part which was withheld.

If interest was paid to you on the check…

You should not include the amount in the Deposit Refund of Liabilities and for this, you need to follow the below mentioned steps instead:

  • Perform the above step from 1 to 5.
  • Select the Group the deposit with Undeposited funds
  • Under the Deposit total field, provide a refund amount minus the interest paid.
  • Now perform the steps 7 to 9.
  • Now, make a Deposit for the interest and provide the amount in Undeposited Funds. Doing this will allow will create one deposit with both payroll liabilities and added interest.

Reach Us For Support

Hopefully, you find this article helpful and you have a good understanding about how to record a payroll liability refund check in QuickBooks. However, sometimes you can face several issues while doing this. If you have some doubts while recording a payroll liability refund check in QuickBooks, then you can contact us at our toll-free QuickBooks Support Phone Number +1888-396-0208 to get answers for all your queries and to get an instant support for your QuickBooks issues.

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How To Record A Payroll Liability Refund Check?

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