Disable State Taxes and Unemployment Withholding

Hey there, @Bargainbabelv. I'm here to guide you through disabling state taxes and unemployment withholding in QuickBooks Online (QBO) Payroll.

To achieve this, it's important to review and update each employee's employment details, including their work location and home address, and their tax withholding information for the state tax setup.

Here's how you do it:

1. Navigate to the Payroll menu and open the Employees tab.

2. Select an employee from the list.

3. Scroll down to the Employment details section and select Edit.

4. Choose or add the Work location where State Unemployment Insurance is paid. If you have remote employees, the location may differ from where they physically work. Then, click Save.

5. Proceed to Tax withholdings and click Edit.

6. Go to State withholding. If two states are visible:

• Under the Filing Status dropdown, choose Do not withhold (exempt) if you don’t need to collect state withholding in one state.
• If there’s a reciprocity agreement between the states, select the option based on whether your employee provided a Certificate of Nonresidence form. This form determines which State Withholding is collected.

7. If Local Taxes or Other taxes are applicable, tick the relevant taxes and enter the rates.

8. If you or your employee are exempt from any taxes, click on the applicable tax(es) from Tax Exemptions.

9. Once completed, hit Save.

For more detailed information about the setup, you can visit this article: Set up employees and payroll taxes in a new state.

Additionally, here's an article that can help you enter your employees' prior payroll: Add pay history to QuickBooks Online Payroll.

In case you want to see and print your pay stubs online, check out this article for more guidance: View your pay stubs, time off, and year-to-date pay in QuickBooks Workforce.

I'll keep an eye out for your reply, so feel free to leave a reply below if you have more payroll-related questions. Have a great day!