How to add HST on ITC tax in QBO?

Hi billing-mitechis,

It's great to have you reach out with questions about setting up your HST and ITCs. QuickBooks Online has a comprehensive Sales Tax module that tracks your taxes and ITCs, making filing your taxes a breeze. I can explain how the sales tax module works, so you can get back to doing something more fun than taxes.

To track your taxes in QuickBooks Online you need to set up the Sales tax module. This creates the Tax agency and default sales tax codes for the provinces that you do business in. QuickBooks Online will also create the accounts needed in your Chart of accounts to keep track of your sales tax collected and your ITCs. If you haven't set up your Sales Tax module you can follow the simple steps in this article, Set up and use sales tax in QuickBooks Online. 

The Sales Tax module will create the sales tax codes for sales and purchases. These tax codes will record the GST/HST you collect on sales. They'll also record the GST/HST you pay on purchases; these are your ITCs. When you enter transactions using these sales tax codes it'll track the amounts in the GST/HST payable account the program created. QuickBooks Online will increase or decrease this GST/HST account by the transactions created. It keeps a current total of what is due to be paid or owed to you. When you file the Tax report it moves the total to the GST/HST Suspense account. It then moves it out of the Suspense account when the Refund or Payment is recorded. I have included a few more article regarding sales tax that you may find useful.

• Learn how QuickBooks Online calculates sales tax
• Edit sales tax rate in QuickBooks Online
• File your sales tax return and record tax payment in QuickBooks Online

If you need to create a Sales Tax code just follow these simple steps:

1. Choose Taxes, from the left navigation menu.
2. Select the Sales Tax tab.
3. Click on the Manage Sales Tax button in the top righthand side.
4. Click the Add Tax button.
5. Choose new province, custom rate or group rate.
6. Fill in all the necessary information. Here you'll let the program know under the I pay this on purchases whether the tax is reclaimable. If it's reclaimable it'll record these as ITCs.
7. Click the Add button.

You now have all the information you need to track your sales taxes and get to doing something you love. 

I'm here to help if you have any other questions. Have an awesome day!