Correct payroll deduction error

Thanks for checking in with us, ginamtd. 

If the employee was underpaid due to the deducted health insurance, we can correct this on the next payroll schedule. Just create a paycheck and manually adjust the amount on the health insurance item to add the underpaid amount. Also, when the payroll liabilities are incorrect, we can use a liability adjustment to fix them. Just follow the steps and details in this article: Adjust payroll liabilities in QuickBooks Desktop. 

If you'll need to refund the employee from their overpaid health insurance, we can set up and add a non-taxable payroll item on the employee's upcoming paycheck to refund the excess contribution. There's no need for you to apply a tax on the refunded item since you're giving back the net amount. Here's an article you can refer to for more details about non-taxable reimbursement payroll item.

When creating a paycheck for your employee, let's make sure to add the payroll item under the Other Payroll items section. Just in case you'll need to refund an employee for a deduction such as 401(k), health insurance, or wage garnishment that was over withheld or exceeded the annual limit, check out this article for more details: Refund an employee for a deduction that was overwithheld. 

You can always browse this link here if you need help with adding and managing your tax forms. It'll route you to our general payroll topics with articles.

Feel free to update us after trying the steps, as I want to ensure this is resolved for you. Just reply to this thread and I'll get back to you. Have a wonderful day ahead.