QB Issue Resolution:

“taken out of the contractors credit card payout totals”

Like this:

Pay the cost as Other Expense.

Create the payment to the contractor as Gross. Then, use a Negative entry Split to the same Other Asset account to show this holdback is Repayment of that earlier loaned amount. Now you have captured their True Gross earnings, but this is a Net Banking or lower payout. Now 1099-Misc is Correct. Do not report the Other Asset account activities.

Direct payments to you are deposited against that other asset, as well, to show it reduces the running balance they owe you.

Resolution for Issue 'If the business paid a 1099 Independent contractor’s bill then the contractor paid the business back and that money was deposited into the bank how is that categorized?' available: Yes (Solved).
Source: Intuit Community forum.

If the business paid a 1099 Independent contractor’s bill then the contractor paid the business back and that money was deposited into the bank how is that categorized?: 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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