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.
"regular" check to the employee for the same amount as the
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.
Go to the Lists menu and click Payroll Item List.
Click the Payroll Item menu button, then click New.
Select Addition and click Next.
Choose a name for the account and click Next.
On the Expense account screen, choose the same other current liability
account (for example, Owed to Employees) you used on the liability
Choose None for the tax tracking and do not select any taxes on the Taxes
Specify to calculate this payroll item on net pay.
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.