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Reimbursing an employee for overwithheld payroll taxes

If you've overwithheld employee-paid taxes and have entered a liability adjustment to decrease the employee's total for the tax, reimburse the employee for the overwithheld tax amount as follows.

  1. Write a "regular" check to the employee for the same amount as the liability adjustment.

  2. On the Expenses tab, choose the same other current liability account (for example, Owed to Employees) you used on the liability adjustment.

    Alternatively, you can reimburse the employee with an addition payroll item on a paycheck.

  3. Go to the Lists menu and click Payroll Item List. Shortcut

  4. Click the Payroll Item menu button, then click New.

  5. Select Addition and click Next.

  6. Choose a name for the account and click Next.

  7. On the Expense account screen, choose the same other current liability account (for example, Owed to Employees) you used on the liability adjustment.

  8. Choose None for the tax tracking and do not select any taxes on the Taxes screen.

  9. Specify to calculate this payroll item on net pay.

  10. Click Finish.

Use the Addition payroll item to add the amount of overwithheld tax to the employee's next paycheck. When you use the item, you automatically reduce the balance in your other current liability account.

KB ID# H_PAY_REIMB_EMP_FOR_TAXES
9/28/2016 4:57:31 AM
PPRDQSSWS400 9138 Pro 2017 6247fd