In QuickBooks Desktop, I've put credit card rebates in an income account, but then they are on the nonprofit Statement of Financial Income and Expense (P&L statement). I'd rather use a contra account as a subaccount of the credit card account because it's really not income. I tried setting up such an account, but using the Credit Card refund form, I got unwanted offsetting entries. Short of making a journal entry, what am I doing wrong?
The issue is that you're trying to make the rebate a sub-account of the cc liability account. That creates both a cc debit (reduction in cc liability, which you want) and a cc contra sub-account credit (offsetting increase in liability, which you don't want). Rebates are considered a contra-expense account, not a contra-liability account. They will, and should, reduce expenses on your P&L (NFP Statement of Activities). CC rebates are technically not considered part of gross income, but they do increase net income because they reduce expenses.
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