Tax-only credits often cause discrepancies or inaccuracies on tax returns, so use them cautiously. Rather than importing tax-only credit, your firm might consider having clients reverse the original entries and rebill at the correct rate. Cases may involve:
- Purchases with tax added that are later identified as sold for resale
- Customers identifying that they were charged at an incorrect tax rate
Before you begin
If you decide to import these transactions, download the transaction import toolkit.
Follow the instructions for importing transactions, but pay special attention to the values in the following columns:
- ProcessCode (A) should be 2.
This means that you're creating a new transaction with a tax override.
- DocType (C) should be 5.
This means that you're creating a Return Invoice transaction.
- Amount (N) should be 0.
This means that the line item return amount is $0.00.
- TotalTax (AP) should have a negative value.
This is the total tax amount that is being credited.
For accounting purposes, if you import a tax-only credit, there will be a taxable amount associated with the credit. From an audit perspective, the taxable amount is still on the books and there is no other way to report it on a return because returns don't identify the tax credit. The taxable amount is always affected.