If it was deducted from your account in 2019 it should be deducted as an expense in 2019.
In 2019 you no longer had the use of the money.
The employee will report it in 2020 because that's when it became available to the employee.
This is a common situation, but since you are both on a cash basis, you should both report on a cash basis. This should not be an issue with the IRS.
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