Record a GST/HST refund from the CRA

A refund cheque from the CRA is not income. It settles a balance your books are already carrying, so it clears your sales-tax account instead of adding revenue. Booking it as revenue overstates your sales and inflates the profit you pay tax on.

The refund arrived on your bank feed or statement

When the deposit is already sitting in Ledger › Banking › Transactions, record it from the line itself. If you or your accountant already booked the refund in a journal entry, the picker lists that entry before it records anything; see "If the refund is already in your books" below.

Record the filing first (see the next section). The refund clears a receivable that filing creates, so an unfiled period has nothing to clear.
Open the deposit's details with the arrow at the right of the row, and look under "Not what it looks like?".
Click Tax refund, pick the filed period the cheque settles, choose GST/HST or QST, and confirm. The period whose filed refund is exactly this deposit is marked matches this return in the list (matches the books' figure when TALISK_HQ has no copy of the return and worked the figure out from your books). If you pick a different one while another matches, TALISK_HQ points that out but still lets you go ahead, because interest or an offset can make the two differ.

TALISK_HQ posts the refund entry (a debit to that bank account, a credit to the sales-tax account), links it to the period, and the line reads tax refund instead of sitting uncategorized. Its Category column names that sales-tax account in grey italics, which is not a category to fill in. If you had already recorded the refund from the GST/HST tab at the same amount, the entry is linked to the bank line rather than posted twice. The Undo tax refund control in the same panel reverses it. Undo does not put back the category the deposit had before you marked it: until you categorize the deposit again, or mark it against the right period, it posts nothing, and your books show that bank account short by its amount.

A refund on a return you filed

The filing card offers two buttons, and they do different jobs. Mark as Filed is for a return you filed from the figures on this page. If you filed the period somewhere else, in QuickBooks, Xero or your accountant's software, use Filed elsewhere beside it, which records the return you actually sent and leaves your books alone. See "Record a GST/HST return you filed somewhere else". Either way the period ends up filed, and the refund steps below are the same.

Go to Ledger › Reports › Tax › GST/HST and set the period picker to the filing period.
Click Mark as Filed. The dialog shows the refund or balance the return records (line 113) and what filing does to your books, before you confirm with Mark as filed. You can save the confirmation number, and leaving the lock checkbox on prevents backdated changes to the period.
Marking it filed posts the remittance entry, which moves the period's collected tax and input tax credits into GST/HST Payable (net), account 2110. In a refund position that leaves a receivable sitting there.
The green Filed banner now shows, with an amber "GST/HST unpaid" pill. Click Record payment / refund at the right of that banner.
The dialog fills in line 113, the balance on the return, and opens on "refund" automatically when it is negative. If you paid instalments during the year, line 113 has already taken them off, and the dialog says so. Check the amount against the refund you received, and enter the date the money hit your bank. Some dates are refused; see "Dates TALISK_HQ will not accept" below.

The entry posted is a debit to Cash / Bank, account 1000, and a credit to 2110, which clears the receivable. The dialog names that account as Paid into. If the refund also arrives on a bank line TALISK_HQ imports, marking that line as a Tax refund later links the two and moves the money onto that bank account, as long as the amounts are the same. The same button sits on every row of GST/HST returns if the period was filed a while ago.

Dates TALISK_HQ will not accept

Both places check the date before they record the refund, and say why:

A refund dated before the period's last day. No refund arrives before the period it refunds, so the date or the period is wrong. The last day of the period itself is fine. On a bank line the date is the deposit's own, so a deposit dated before the period's last day cannot be that period's refund; pick the right period instead.
A refund dated before your conversion date, the day your TALISK_HQ books begin. Money that moved before then is already in your opening balances, so there is nothing to record: recording it again would count it twice. If the opening balances are wrong, correct them on Ledger › Accounting › Opening Balances. A refund for a period that ended before your conversion date, received on or after it, is fine: it clears the receivable your opening balances carry.

If the refund is already in your books

TALISK_HQ checks before it records, from either place, and the GST/HST tab's dialog and the bank line's Tax refund picker both say so before you press anything. The check looks for three things:

A journal entry posted by hand that already moves GST/HST Payable (net) the way this refund would.
A bank deposit of exactly the refund amount, dated on or after the last day of the period, that is already categorized to another account, such as Other income or a suspense account. That deposit is the money already in your books.
On the bank line only: an entry that moves the account the deposit is coded to the opposite way, by exactly the refund amount. That is a refund moved out of a suspense account by hand through some other account.

Each listed entry shows its date, the amount, the other accounts it touches, and a flag when it is the same amount as the refund. View entry opens it.

If an entry already records this refund, record nothing. Close the dialog, or on the bank line leave the deposit as it is. Going on would book the same money a second time, and on a deposit categorized to a suspense account it also leaves that account holding the refund.
If the only record is the deposit itself, categorized to another account, record the refund from that bank line instead: on Ledger › Banking, open the deposit and use Tax refund. That replaces its category, so the money is booked once. When the deposit cannot be marked that way (a card line, a foreign currency line, or one already matched), the dialog says so, and the fix is a journal entry from your accountant.
If it recorded part of the refund, change the amount in the dialog to what is still to come before you record it.
If it is something else, such as an adjustment your accountant posted, tick I've checked and record the refund.

The deposit's own category is never listed: marking the line replaces it. If another bank line holds the same deposit (it was imported twice) and that line is categorized, the bank line picker lists it too. Remove the duplicate before you mark.

The check cannot see a deposit that is not exactly the refund (the CRA added interest, or kept part of the refund to pay another balance), a Quebec deposit that covers the GST and QST refunds together, or a clearing entry that moved the money through an income or expense account. Look for those yourself before you record.

The bank line also refuses a refund when another filing period with the same dates already has one recorded. Only older books can hold that, and the message names the refund that is already there.

This comes up most on a period filed in QuickBooks or Xero before you moved to TALISK_HQ, where the refund was often booked by hand with the old system's closing entries.

The check also runs the other way round. The New Journal Entry form asks before posting an entry that would record the refund again, and Move balance warns in its preview. And if a journal entry, or a deposit of the same amount coded to another account, turns up after TALISK_HQ recorded the refund, the Books Health panel shows a card saying the refund may be recorded twice; A GST/HST payment or refund recorded twice explains which record to remove.

Record which entry settled it

A filed period reads GST/HST paid only once TALISK_HQ knows what settled it. When the refund is already in your books as a journal entry, for example with your old system's closing entries, link that entry instead of recording the refund again:

On the GST/HST tab's green Filed banner, click Link a settlement.
TALISK_HQ lists the journal entries that already move GST/HST Payable (net) the way this refund would, with their date, amounts and memo, and View entry. Click Link this entry on the one that records it.

The period then reads GST/HST paid on that entry's date, marked journal entry, with View entry beside it. Nothing is posted and the entry is not changed. While it is linked, TALISK_HQ refuses to record another refund or payment for that period, from the GST/HST tab or from a bank line, and names the entry when it refuses. Record payment / refund on any other period stops listing the linked entry.

Unlink beside the pill undoes it. The period reads unpaid again and Record payment / refund comes back. TALISK_HQ records who unlinked it and when.
If the linked entry is deleted, or changed so it no longer moves the net tax account the way a refund does, the period reads unpaid again by itself.
A deposit categorized on a bank line is not linked here: mark that deposit on Ledger › Banking with Tax refund instead.
Linking is refused once TALISK_HQ has already recorded a refund or payment for the period.
When the entry's amounts differ from the return's refund, or it moves more than this return, TALISK_HQ asks you to confirm first: once linked, another period's Record payment / refund no longer asks about it, so if it also settles another return, recording that one would not warn you. Link it only if it is this return's refund. If one refund covered more than one return, split it into one journal entry per return and link each to its own return.
An entry that moves the net tax account both ways (for example one entry that both receives the refund and pays a later balance), and an entry undone by an exact reversing entry, are listed with the reason and cannot be linked.
If TALISK_HQ has no copy of the figures you filed, the refund it shows is rebuilt from today's books, and the dialog says so. Record the figures you filed first (GST/HST › Record the figures you filed) when they differ.

Paid before TALISK_HQ. A return for a period that ended before your conversion date was usually settled before you started using TALISK_HQ, and that money is already in your opening balances. In Link a settlement, choose It was settled before TALISK_HQ. The period reads GST/HST paid before TALISK_HQ, nothing is posted, and Undo beside the pill reverses it. Only the owner, or a bookkeeper with full access, can record it, and it is not offered for a period that ended on or after the conversion date. TALISK_HQ asks you to confirm first when the refund could only have come after your conversion date (the return itself was due on or after it), or when your books already hold an entry after that date that may record it: if the money moved after you started using TALISK_HQ, link that entry instead.

Remove a refund recorded by mistake

A refund recorded with Record payment / refund can be removed whether or not the period has been filed:

On a filed period, click Remove refund beside the GST/HST paid pill on the GST/HST tab's green Filed banner, or on the period's row in Ledger › Reports › Tax › GST/HST returns.
On a period that has not been filed yet, the refund shows on the GST/HST tab just above the Adjustments box, as GST/HST refund received, with the same button.

Check the amount and date in the confirmation, and confirm. TALISK_HQ deletes the refund entry, so the period reads unpaid again. On a filed period you can then record the refund again with the right figures, and the figures you filed do not change: the return, its GST34 worksheet and the filing entry stay exactly as they were. Nothing is sent to the CRA.

On a filed period, the button appears only where TALISK_HQ can remove the refund. It does not appear, and TALISK_HQ will not remove the refund, when:

The refund is dated inside a closed period. An entry inside a closed period is never deleted. Post a correcting journal entry dated in an open period instead.
A bank line records the refund. Use Undo tax refund on that line instead. If the line was deleted from Banking since, for example when a statement was deleted to import it again, it still claims the refund and there is no line left to undo it from: ask your accountant which record to keep.
The refund was recorded before the filing period itself existed, so it is not that period's own refund.

An overpayment with no return behind it

Sometimes the cheque is not a refund on a return at all: a double remittance, or a reassessment in your favour. Your payment already pushed 2110 past zero, so there is no filing period to record it against.

Post it by hand instead. Go to Ledger › Accounting › Journal Entries, click New Entry, and debit your bank account with an offsetting credit to GST/HST Payable (net). That clears the balance the over-remittance left behind.

Instalments you overpaid during the year are different. The annual return claims them: once they are on line 110, line 113 comes out negative, and the Record payment / refund dialog on that return fills in the refund. Record it there rather than by hand. Doing both books the same refund twice, and the Journal Entries screen does not check.

Do not categorize the deposit

Use the Tax refund action on the bank line, or record it from the GST/HST tab. Do not code the deposit to a category.

Bank categorization deliberately offers expense accounts, capital assets, owner and shareholder accounts, and prepaid balances. It does not offer the sales-tax accounts, so you will not find 2110 in the list. Worse, a number the category resolver does not accept falls back silently and the deposit ends up credited to revenue, which is the exact error this article exists to prevent.

Interest and offsets

Two things make the cheque a different size from the refund, and neither is handled by the flow above:

The CRA paid you interest. The refund portion clears 2110; the interest is income and belongs in an interest income account. Split it across two lines in a manual entry. The Banking line's Tax refund action refuses a deposit whose amount differs from the recorded refund for the same reason: the difference needs its own line, not a silent merge.
The CRA kept part of it. They routinely net a GST refund against payroll or corporate tax arrears. A smaller cheque is not a write-off, it is a payment against that other liability, and it needs its own line.

TALISK_HQ produces the figure and the worksheet. Whether a refund is correct, and how a reassessment should be treated, is a question for your accountant.