You can add Offline Payments with negative amounts for the payment amount and/or withholding amount. This will allow you to correct a payment that was sent with incorrect tax treatment. Here is how to use this for a few common use cases:

Taxes were withheld when no taxes should have been withheld:

Add an Offline Payment to the recipient dated on the same date and marked as 'taxable' with the Payment Amount as negative (prefixed with a "-", e.g. "-10.00") and the Tax Withholding amount is the same amount was withheld on the original payment as a negative amount (prefixed with a "-", e.g. "-10.00") as well. This will offset the withheld amount so that there is no withholding reported for that payment at the end of the year. You also need to separately send a new payment to the recipient for the originally withheld amount to make them whole, please send a separate payment and mark that payment as non-tax reportable/exempt to avoid the earnings being reported twice.
If the withholding payment was made outside of Trolley then the Payment Amount should be entered as 0.00 and the Tax Withholding amount as the withholding that you paid out (prefixed with a "-", e.g. "-10.00").

The payment was sent as tax reportable when actually it should have been non-tax reportable (exempt):

Add an Offline Payment to the recipient dated on the same date and marked as 'taxable' with the same amount as the original payment however the Payment Amount should be as a negative amount (prefixed with a "-", e.g. "-50.00"). This will offset the earned amount so that it won't be reported for that original payment at the end of the year.

The payment was sent as non-tax reportable (exempt) when actually it should have been tax reportable:

Add an Offline Payment to the recipient dated on the same date and marked as 'taxable' with the same Payment Amount as the original payment and the same Tax Withholding Amount as the original payment. There is no need to use a negative amount for this offline payment.