Theresa
I have a refund check from the US Treasury for a over payment on the 941's. What is the best way to record that? I show in the past someone made a fake inv. then applied the payment. Is that the correct way
Thank you for your post - it was very helpful for me today.
Hi Band123!
First of all, you want to be 100% sure that you are due this refund. Were you expecting it? Did you know that you had overpaid your 941 taxes? Was it due to the new COBRA Subsidy that was put in place this year? If you aren't sure, then your next step is to contact the IRS and ask why you received a refund. You'd be surprised at how many times they send refunds by mistake.
Once you're sure the refund is valid...run a "Payroll Liability Balances" report. You can find this under the Reports dropdown on the top menu bar, then Employees & Payroll, then Payroll Liability Balances. Adjust the date range to include the quarter for which you received the refund. If you show negative balances for the 941 taxes here (and hopefully they add up to the amount of your refund), see step A below. If you do not show negative balances for the 941 taxes (meaning someone has adjusted them out of QuickBooks somehow), see step B below.
A) You see negative balances on your Payroll Liability Balances report for 941 taxes for the quarter covered by your refund check: You will do a "Deposit Refund of Liabilities" in QuickBooks to record your refund check. This is found under the Employees dropdown on the top menu bar, then under Payroll Taxes & Liabilities. For more information about this process, search for "Record a payroll liability refund check" in the Help menu in QuickBooks.
B) You do NOT see negative balances on your report for 941 taxes: Just do a regular deposit in QuickBooks by clicking "Record Deposits" on the home screen.
I hope this helps. Please mark this question as Solved or Helpful or you can post a reply to ask additional questions. Thanks!
