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L
lstjacques
January 31, 2019
Solved

How do you record a state income tax refund that will be applied to the next estimated (next year) state income tax due so as to reduce the payment?

  • January 31, 2019
  • 3 replies
  • 0 views

We overpaid on our estimated state income tax in 2018.  We now find that we will get a refund in 2019.  Instead of receiving a check, we can apply the refund toward our 2019 estimated state income tax payment to make it less.  How do we show the refund in the accrual financial statements in 2018, and then apply that in 2019 to the payment due?

Best answer by qbteachmt

Thank you for the help.  I will make sure that I keep that in mind going forward.  Appreciate the help.  Just to be clear, I did clarify in the 1st response that it wasn't a payroll issue...but you are correct, I didn't initially say that, my error.  Again, thank you for the help.


You had it Close; you just had the first payment backwards, if you posted as Expense. Good job.

3 replies

J
JanyRoseB
January 31, 2019

Hi there, lstjacques.

 

Thanks for taking the time to reached out to us. I'm here to help and provide some information on how to record a state income tax refund.

 

Once you have an overpayment, QuickBooks will detect it and will automatically lower the amount of the next liability periods by the overpayment amount. You may also pull up the Payroll Liability Balances report, to check the overpayment amount. 

 

Here's how: 

  1. At the top menu bar, click Reports.
  2. Select Employees & Payroll. 
  3. Choose Payroll Liability Balances. 
  4. Set the date filter. 

For additional reference, you can check this article: Run payroll liability balances report. 

 

If you need further assistance from our phone support, here's how you can contact them: 

  1. Click this link: https://payroll.intuit.com/support/contact/?infosrc=qs&service=16.
  2. Select your payroll subscription.
  3. Choose Payroll for the topic. 
  4. Click View Contact Info to get the phone number.

If you have additional questions about the overpayment in QuickBooks. I'll be around to help. 

L
lstjacquesAuthor
February 1, 2019

Thank you, but this is not about payroll but CT State income tax, which is not payroll tax, so this doesn't work for what we need.  Is there another solution?

AlcaeusF
AlcaeusF
February 1, 2019

Hello there, lstjacques.

 

Thank you for getting back to us in the Community. I'm here to provide additional assistance with State Income Tax overpayment in QuickBooks Desktop.

 

If you already consulted your State agency and they allow you to apply the overpayment to the current year, you can add the refund as a payment in the system. Once you enter them, it'll decrease your tax due in the system.

 

Here's how:

 

  1. Click the Help tab at the top menu bar.
  2. Click About QuickBooks (the last option at the bottom).
  3. Press and hold the Ctrl + Alt + Y keys.
  4. Click Next four times.
  5. Click Create Payment.

I'm adding an article for more insights about entering historical tax payments:

 

Enter historical tax payments in Desktop payroll.

 

Please keep in touch with me here so I can ensure your issue is addressed.

IamjuViel
IamjuViel
February 1, 2019

Hello there, @lstjacques.

 

Recording the refund you’ve received from your state to the correct account in the chart of accounts is my priority. With that being said, allow me to share some information on how this works in QuickBooks Desktop.

 

If I may ask, what account in the chart of accounts were affected when you send a payment for your estimated state income tax in 2018? If you use QuickBooks in paying your estimated state income tax, may I ask how did you made the payment? If the state income tax payments was paid after running a payroll, you may refer to the steps provided by my colleague, @JanyRoseB, in recording the refund. The refund will be applied to the payroll liability account.

 

If you write a check and paid your State Tax agency with it, then you can record the refund like how a vendor refund is processed in QuickBooks Desktop.

 

Lastly, if you are referring to the Sales tax you’ve paid. To record the refund you’ve received, you can do it by creating a sales tax adjustment. For detailed instructions, you may check out this article: Process sales tax adjustment.

 

If you’re still unable to record your refunds,  I’d recommend reaching out to Customer Care team. A specialist will be able to look up your account securely and further assist you via secured remote access session.

 

Here’s how to contact us:

  1. Go to: https://help.quickbooks.intuit.com/en_US/contact.
  2. Choose your QuickBooks Product.
  3. Select your QuickBooks version.
  4. On the Contact Us page, click a topic.
  5. Click on the Get Phone Number button to see the support number.

Stay in touch with me and let me know how it works on your end. I ‘m always here to help you accurately record the refund you’ve received in QuickBooks Desktop.

qbteachmt
qbteachmt
February 1, 2019

You either Have a Refund, or Have the overpayment condition.

 

If you overpaid the Payroll item on the Liability Tab, the payroll system already has the Amount as negative. Next time you generate that payment, use Create Custom Liability payments and include the timeframe that lets you select Both what you accrued now and the amount overpaid, previously.

 

If you accidentally paid it outside of Payroll, then you would post that as Other Current Asset. Then later, you can show the earlier banking reduces what you owe; use Pay Liabilities, select what you owe. Click on the Expenses tab and put a Negative for the Other Current Asset and the amount you want to show is Applied now, hit Recalc and you have a Reduced Banking transaction, while showing you Paid Taxes for what you owed for that cycle, but the Banking is reduced.

 

If you got a Refund, you would Make Deposit to the same account you tracked it as overpayment; in my example, that would be "from" Other Current Asset.

 

There is no Payroll Adjustment to make. You never make a JE for anything to do with QB Payroll, either. That will make things Worse.

J
jkumavat
September 13, 2022

Hi Team,

 

I need help in entering a State of Arizona Tax refund.

This refund is in the form of a check. I need help in recording this into QB.

R
rvrfrf
September 13, 2022

Thanks for becoming part of the Community, jkumavat.

 

If you've received a refund check from a tax agency, it's possible you might have overpaid payroll taxes. I'd recommend checking your Payroll Liability Balance report and creating a payroll liability deposit to record it in your books.

 

Here's how to run your report:

  1. In the left navigation bar, go to Reports.
  2. Enter "Payroll Liability Balances" in your Find report by name search field.
  3. Choose Payroll Liability Balances.
  4. Enter an appropriate date range and customize it as necessary with its available options.
  5. Select Run report.


Look for an amount that matches your refund check's amount.
Once you've found it, you'll need to record the refund check.

 

In the event you don't find an amount that matches it, review the refund notice. Your check may include interest, or some of the refunds may have been applied to past-due taxes.

 

If your tax agency withheld part of the refund, record it as a payroll liability refund check, enter your refund's full amount in the Deposit total field, then enter any appropriate tax payments to account for the part that was withheld. This will reduce your liability on the report.

 

In the event you're using our Payroll Assisted plan and the refund is from a period before you used Intuit's payroll services, you'll need to enter your check as a deposit to its appropriate bank account.

 

You'll also be able to find many detailed resources about using QuickBooks in our help article archives.

 

I'll be here to help if there's any questions. Have a wonderful day!

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