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JBHU103
February 18, 2025
Question

Changing city income taxes after employee moved

  • February 18, 2025
  • 1 reply
  • 0 views

My company is in one of the few cities with a city tax and a resident income tax.  An employee also lived in that city, but has moved so that they no longer owe a resident taxes.  I changed their address in the 'Payroll->Employees' and then clicking on the employee.  In the "Tax Withholdings" section under "Local Taxes" it has a checkbox next to the 'city, county' (actual names) where my company is located.  There is no further breakdown for 'work tax' and 'resident tax' as I remember.  The help says to click on "Edit Location", but there is no "Edit Location" on that page.  Is this now set up automatically and the help has not been updated, or is there something else I need to do?

 

1 reply

Candice C
Candice C
February 18, 2025

Good morning, @JBHU103. 

 

Welcome to the Community! I'd be more than happy to help you sort this out with your employee's local taxes. 

 

To clarify, is the employee living in a new city, or both living and working in a new city? 

 

You can also send us screenshots of the page you're stuck on so we can help you determine the next steps to get this resolved and changed properly. 

 

I'll be waiting for your response! 

J
JBHU103Author
February 18, 2025

Thanks for addressing this.

The employee is living in a new area which does not have local tax.  They are still working at our site which is in a city which has a work and a resident tax.

They used to live in that city, and were subject to both the work and resident income tax.  Now they should just be responsible for the work tax.

I've changed their residence address, and I now see what's in the attachment.

S
Sherrie_F
February 18, 2025

Thanks for confirming and returning to this thread about updating your employee's tax withholdings, @JBHU103. Since you've already changed their address, our goal is to ensure they're correctly set up to withhold only the necessary work tax moving forward. Let's walk through the steps to make sure everything is accurate and compliant with tax regulations.

 

First, you'll need to navigate to the Tax withholdings section to update and edit your tax settings. This way, you can ensure that only the appropriate work tax is applied. It not only supports your employee in managing their finances but also helps your organization maintain accurate payroll records.

 

To review local tax withholding, here's how:

 

  1. On the left navigation panel, look for the Payroll tab.
  2. Select Employees.
  3. Find and select the employee whose address you've changed by typing in the Find an employee search box.
  4. Once you select your employee, scroll down to the Tax withholdings section and click Edit. 
  5. In the Local Taxes section, ensure that only the checkbox for the work tax (for the city where the employee works) is checked. Note: If the resident tax is still showing as applicable, and since they no longer reside in the city that imposes that tax, you may need to uncheck or remove that entry.
  6. When you're ready with everything, hit Save.

 

Moreover, if there's a specific entry for resident tax that hasn't been automatically updated, you'll want to manually remove or deselect it. However, if you don't see a separate option for resident tax and only have a checkbox for "city, county," ensure that the employee's resident status reflects their current address.

 

For more information about local tax withholding for your company and employees, you can check this out: Set up local taxes in QuickBooks Online Payroll.

 

Lastly, I've included an article that'll help you view your local tax liability amounts: Run payroll reports.

 

I really appreciate you taking the time to work through this with me, @JBHU103. I know how important it is to get your employee's tax situation sorted out, especially after their move. If you have more questions or need assistance with anything else in QuickBooks, please feel free to reach out. I want to make sure you have everything you need.

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