Do I need to withhold both city taxes for where an employee lives and works?

I want to ensure accurate state tax withholding for your employee, finance-akronfir.

QuickBooks Online (QBO) adheres to state and IRS regulations. Payroll taxes such as state and local withholdings are based on the employee's residence and work location. These taxes vary based on the state's laws where your employee lives and works.

To get this issue sorted out, I recommend consulting your state agency to determine what income taxes you may be subject to.

Additionally, some states have reciprocity agreements. To determine if one exists between your employee's work and residence states, you can check out this article: About multistate employment payroll situations.

Furthermore, access state agency websites for payroll details on tax forms, withholdings, unemployment, and other taxes.

I'm also adding this reference about how the system calculates taxes: Learn how QuickBooks calculates taxes.

I'll be right here if you have further questions about payroll taxes. Feel free to leave a comment below, and I'll get back to help you.