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O
oldgreygrammy
November 21, 2022
Question

We received a refund from IRS for 3rd quarter 941 of this year. I THINK it's because I made a mistake on a paycheck that's been cashed.

  • November 21, 2022
  • 1 reply
  • 0 views

In July, our former pastor's final paycheck was reduced by the pastor's utility bills once she left the parsonage. I should've used Misc. expense for that reduction instead of Pastor's utilities (which is an addition to her salary) It appears to have reduced her federal withholding by half it's normal salary tax. When QB created the 941 form, the total wages on line 2 is $85.31 less than Payroll summary for that quarter. The refund is $85.59. 

Should I keep the refund? Should I post it to Payroll Expense acct? 

 

How will this affect her w-2? 

Is there a solution???? 

1 reply

J
JamesAndrewM
November 21, 2022

Hello there.

 

You may receive a refund check if you have overpaid payroll taxes. You can check your payroll liability balance report and then create a payroll liability deposit to record this in QuickBooks to make sure that your taxes are accurate.

 

If you use QuickBooks Desktop Payroll Assisted and your refund is from a time before you used our payroll service, you must deposit the refund check into your bank account. Don’t use the instructions below. Here's how:

 

  1. First, create a payroll liabilities balance report. Locate the amount that matches the refund check amount. 
  • Proceed to step 2 if you find an amount that matches.
  • If you don't find a matching amount, go over the refund notice. The check could include interest, or some of your refunds could have been applied to back taxes.

 

Please see this article for detailed information: Handle a payroll tax refund from an agency in QuickBooks Desktop Payroll.

 

Also, I recommend consulting with your accountant if you have questions on which account to post, how will this affect the W-2, and ensure your records are in tip-top shape. 

 

You can visit this article to know how to refund a customer in QuickBooks Online: Record a customer refund in QuickBooks Online.

 

The Community always welcomes you for further inquiries with regard to the tax refund check. Have a good one!

O
oldgreygrammyAuthor
November 21, 2022

I use Enhanced payroll. And when qbks generated the 941, I couldn't override the incorrect wages. I don't understand your step 1 and step 2 references.

J
JamesAndrewM
November 21, 2022

Hi there.

 

You don't need to override your 941. To record the refund in QuickBooks, you need to create a liability check. Step 1 in the article is to look for the amount that matches the refund check amount. While in step 2 is for you to enter the refund as a payroll liability checks in QuickBooks. Here's how:

 

  1. Go to Employees, and choose Payroll Taxes and Liabilities. 
  2. Select Deposit Refund Liabilities.
  3. Click the vendor dropdown, and select the agency that sent the refund check.
  4. In the Refund Date field, enter the deposit date.
  5. On For Period Beginning field, enter the first day of the pay period that the refund affects.
  6. Choose how you want QuickBooks to handle the deposit.
  7. On the Taxes and Liabilities section, select the payroll items affected by the refund.
  8. In the Amount column, enter the positive amount.
  9. Click OK.

 

Once done, you may need to file a corrected 941 for overreported tax. For more details, see page 5 of Instructions for Form 941-X.

 

I suggest consulting your accountant if you have questions with regard to 941-X, which account will be affected, and for additional assistance to ensure your records are in shipshape. 

 

You can visit this article to know when and how to submit your W-2 forms to Federal and state agencies: File your W-2 forms.

 

Feel free to drop by the Community whenever you have further concerns regarding your tax refund check. Stay safe!

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