Issue/Symptom/Question

How do I refund the local tax money to an employee? 

Environment

Module: Payroll

Time Entry-Reimbursement

Manual Payment Adjustment

Resolution/Fix/Answer

• The system cannot reduce a tax to make a payment to an employee so a reimbursement should be used to refund the money
•  Once the payroll is complete, run a reimbursement history to see the employees that received the payback
• A Manual payment adjustment can be used to reduce the tax and offset with the reimbursement so a net zero payment occurs to offset the entry
• The reimbursement will charge a liability or expense account 
• A Payroll Adjustment account will need to be used

Steps in the Process:

1. Pay the money back with the reimbursement
   
   1. PENTA books the expense
2. Offset the reimbursement with the Tax using the Manual Payment Adjustment process -Manual Payment Adjustment Entries to Refund Local Taxes Incorrectly Withheld
   1. PENTA offsets the expense
3. Net impact is zero in the GL and the sub-ledger is up to date for W-2 purposes