QB Issue Resolution:

Most of the payroll services would have the option to handle TIPS the way you want it but unfortunately, QBO payroll doesn’t have that option. Intuit has hard-wired to a specific expense account rather than based on preference setting. So, it seems you’ve two options:

 

1) continue the way you’re doing —reclassify with a journal entry
2) record tips directly to default expense account instead of liability account (which is normal accounting method). Time to clear tips in/out from P&L would be very short (less than 1-month max) so it may not be a big issue. Ask your Accountant.

Resolution for Issue 'How best to handle paycheck tips in QB Online?' available: Yes (Solved).
Source: Intuit Community forum.

How best to handle paycheck tips in QB Online?: this issue or error code is a known issue in Quickbooks Online (QBO) and/or Quickbooks. Support for this issue is available either by self-service or paid support options. Experts are available to resolve your Quickbooks issue to ensure minimal downtime and continue running your business. First try to resolve the issue yourself by looking for a resolution described below. If it is a complex issue or you are unable to solve the issue, you may contact us by clicking here or by using other support options.

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