diff --git a/app/Services/Payment/RefundPayment.php b/app/Services/Payment/RefundPayment.php
index 3a514b79d4..061490542a 100644
--- a/app/Services/Payment/RefundPayment.php
+++ b/app/Services/Payment/RefundPayment.php
@@ -124,6 +124,10 @@ class RefundPayment
             }
         } else {
             $this->payment->refunded += $net_refund;
+
+            if($this->refund_reversed_invoice){
+                $this->payment->refunded += $this->credits_used;
+            }
         }
 
         $this->payment->setRefundMeta($this->refund_data);
diff --git a/tests/Feature/CreditTest.php b/tests/Feature/CreditTest.php
index b317c86365..608c38d560 100644
--- a/tests/Feature/CreditTest.php
+++ b/tests/Feature/CreditTest.php
@@ -45,6 +45,116 @@ class CreditTest extends TestCase
         $this->makeTestData();
     }
 
+    public function testNewCreditDeletionAfterInvoiceReversalAndPaymentRefund()
+    {
+        $c = Client::factory()->create([
+            'company_id' => $this->company->id,
+            'user_id' => $this->user->id,
+            'balance' => 0,
+            'paid_to_date' => 0,
+        ]);
+        
+        $ii = new InvoiceItem();
+        $ii->cost = 100;
+        $ii->quantity = 1;
+        $ii->product_key = 'xx';
+        $ii->notes = 'yy';
+
+        $i = \App\Models\Invoice::factory()->create([
+            'company_id' => $this->company->id,
+            'user_id' => $this->user->id,
+            'client_id' => $c->id,
+            'tax_name1' => '',
+            'tax_name2' => '',
+            'tax_name3' => '',
+            'tax_rate1' => 0,
+            'tax_rate2' => 0,
+            'tax_rate3' => 0,
+            'discount' => 0,
+            'line_items' => [
+                $ii
+            ],
+            'status_id' => 1,
+        ]);
+
+        $repo = new InvoiceRepository();
+        $repo->save([], $i);
+        
+        $i = $i->calc()->getInvoice();
+        $i = $i->service()->markPaid()->save(); //paid
+
+        $payment = $i->payments()->first();
+
+        $this->assertNotNull($payment);
+
+        $this->assertEquals(0, $i->balance);
+        $this->assertEquals(100, $i->amount);
+
+
+        $credit_array = $i->withoutRelations()->toArray();
+        $credit_array['invoice_id'] = $i->hashed_id;
+        $credit_array['client_id'] = $c->hashed_id;
+        
+        $response = $this->withHeaders([
+                    'X-API-SECRET' => config('ninja.api_secret'),
+                    'X-API-TOKEN' => $this->token,
+                ])->post('/api/v1/credits', $credit_array);
+
+        $response->assertStatus(200); //reversal - credit created.
+
+        $arr = $response->json();
+        $credit = \App\Models\Credit::find($this->decodePrimaryKey($arr['data']['id']));
+
+        $this->assertNotNull($credit);
+        $payment = $payment->fresh();
+
+        $i = $i->fresh();
+
+        $this->assertEquals(\App\Models\Invoice::STATUS_REVERSED, $i->status_id);
+        $this->assertTrue($payment->credits()->exists());
+
+        $client = $i->client;
+
+        $this->assertEquals(100, $client->credit_balance);
+
+
+        $refund_payload = [
+            'id' => $payment->hashed_id,
+            'amount' => 100,
+            'date' => '2020/12/12',
+            'invoices' => [
+                
+            ],
+            'credits' => [
+                [
+                    'invoice_id' => $credit->hashed_id,
+                    'amount' => 100,
+                ],
+            ],
+        ];
+
+        $response = $this->withHeaders([
+            'X-API-SECRET' => config('ninja.api_secret'),
+            'X-API-TOKEN' => $this->token,
+        ])->postJson('/api/v1/payments/refund', $refund_payload);
+
+        $response->assertStatus(200);
+
+        $credit = $credit->fresh();
+        $payment = $payment->fresh();
+        $client = $client->fresh();
+
+        $this->assertEquals(0, $client->credit_balance);
+        $this->assertEquals(0, $client->paid_to_date);
+        $this->assertEquals(0, $client->balance);
+
+        $this->assertEquals(100, $payment->refunded);
+        $this->assertEquals(\App\Models\Payment::STATUS_REFUNDED, $payment->status_id);
+        $this->assertEquals(0, $credit->balance);
+        $this->assertEquals(Credit::STATUS_APPLIED, $credit->status_id);
+        
+    }
+
     public function testNewCreditDeletionAfterInvoiceReversal()
     {
         $c = Client::factory()->create([