How to record temporarily restricted income in QB online?

It's good to have you here, Marsha.

Let me help you record a temporarily restricted income.

I agree with what @4Gal suggested about utilizing the Class tracking feature to separate restricted and unrestricted income. This feature is only available for QuickBooks Online (QBO) Plus and Advanced.

 You can follow the steps below:

1. Turn on the class tracking by going to Settings, then Account and settings.
2. Pick Advanced. Select the Categories section to edit.
3. Click the Track classes switch to turn it on.
4. Select Warn me when a transaction isn't assigned a class. This is optional, however, it means that when you look at reports, you know everything has been classified.
5. Below Assign classes, choose One to entire transaction or One to each row in transaction.
6. Once finished, click Save. Then, Done.

For more info, you can read this article: Turn on class tracking in QuickBooks Online.

After that, set up the class that represents the restricted income. Here's how:

1. From the Settings, select All Lists.
2. Choose Classes.
3. Pick New. Give this class a name.
4. To add a sub-class, select Is a sub-class and select the main class. You can nest up to five classes.
5. Tap Save.

Check out this article for detailed steps: Turn on class tracking in QuickBooks Online.

However, I recommend contacting your accountant while performing this to avoid discrepancies.

You might want to view your transactions by class. Feel free to read this article: Run reports by class in QuickBooks Online.

Leave a comment below if you have additional questions about tracking restricted income. I'll be willing to lend a hand. Keep safe always.