You'll need to free up enough space on the hard drive you use for the backup/restore.
The easiest way to free space on your computer is to delete your temporary internet files in the broswer you use (Internet Explorer, Chrome, FireFox, etc.).
Free space required
Quicken Online Backup requires a minimum amount of free space equal to the total size of the files being backed up, plus 60 MB “Swap Space” for the backup process. For example, if the Online Backup account is a 1 GB account, the computer system performing the Online Backup operation needs 1 GB plus 60 MB of free space on its hard drive.
Online Backups: The Online Backup application creates encrypted archives on the computer before transmitting the data to the Quicken Online Backup servers. These files are stored on the computer temporarily until the Online Backup process completes.
Restoring Online Backups: During the restore process, Quicken uses space on the computer’s hard drive to temporarily store the downloaded encrypted files while it decompresses them.
If you continue to encounter an error after completing the above steps, please contact 1-800-656-6115