Question

Federal withholding not calculating

Forum|Forum|5 years ago
May 4, 2021
5 replies
0 views

The federal withholding taxes are not calculating for some of our employees. They are all using the 2020 W-4 form. I have entered the information off that correctly. Please do not suggest the following as none of that applies.

"These are the possible causes that may affect the tax calculation on your employees' paycheck:"

The total annual salary exceeds the salary limit.
The gross wages of the employee's last payroll are too low.
The tax table is not updated.

I looked at posts from a year ago and it does not look like a solution to this problem has been found. Can you please help? Thank you.

QuickBooks Desktop

J

jamespaul

Hello, Elise.

Thanks for taking the time to scour our Community space for potential solutions. If you haven't encountered this yet, this solution will prove useful in resolving the federal tax calculation issues.

QuickBooks calculates the federal withholding taxes based on the following elements:

Taxable wages
Number of allowances/dependents
Pay frequency
Filing status

You'll want to check how your employees are set up and ensure their payroll tax settings are entered correctly. Here's how:

Go to Employees, then choose Employee Center.
Double-click the employee’s name to open their profile.
Go to Payroll Info.
Check the Pay Frequency drop-down menu and ensure
Click the Taxes button.
Under the Federal tab, double-check the Filing Status and Allowances details. Edit them if needed.
Hit OK.

This article can also give you important pointers about the tax calculations in QuickBooks Desktop: How QuickBooks calculates payroll taxes.

More troubleshooting steps can be found here: QuickBooks Desktop calculates wages and/or payroll taxes incorrectly.

Need to see your employees' year-to-date data and other payroll details? You can run a payroll liability report to get started. This article can provide more details about the report and how to run it: Run payroll liability balances report.

Do you have more questions about your employees? Ask away and I'll help you out. If you have questions about managing your company in QuickBooks, add them to your reply.

E

Elise-KAuthor

This is not a solution. I have checked and rechecked and everything is entered correctly as I said in my original post. After reading through countless posts it does seem like this is a QB glitch and I have seen no resolutions. When is this issue going to be resolved?

M

MirriamM

I can see the urgency of getting this resolved, @Elise-K.

Since you've done all the recommended troubleshooting steps but the issue persists, I recommend contacting our Technical Team. They have the tools to pull up your account to investigate the cause more closely and find another solution to fix the problem.

To reach them, here's how:

Open QuickBooks.
Go to the Help menu at the top.
Select QuickBooks Desktop Help.
On the pop-up screen, select Contact us.
Click the Search for Something else button.
Type your concern in the Ask us anything box.
Hit Search, then scroll down to get your contact options.

You can also check out this link for more information on how to contact them: Contact QuickBooks Desktop support. Ensure to review their support hours, so you'll know when agents are available.

Please let me know if you have other concerns. I'm just around to help. Have a great day.

K

Kitty12

Elise,

I am in this same desperate situation. Been on phone with QB support for hours, no resolution. Did you ever figure out what to do to get federal withholding to calculate correctly?

KORE

We are having the same issue. One of my employees owes over $800 due to QB not calculating this correctly. The issue is inside of QB and how they set up the 2020 W4 in their system. Has anyone found a correction or are we stuck with manually figuring it and using the "extra withholding" option (Step 4 C) on the W4?

C

Charies_M

Welcome to this thread, northcobooks.

First of all, you'll want to review this article about important pointers about the tax calculations in QuickBooks Desktop: How QuickBooks calculates payroll taxes.

In case you haven't updated your payroll to the latest release, I recommend doing so. This is often used to fix payroll issues and downloads the most current tax rates and calculations in your account.

Here's how:

Go to the Employees menu
Select Get Payroll Updates.
Fill in the Download Entire Update checkbox.
Click Update. A window appears when the download is complete.

Here's an article that provides a list of common payroll errors and how to fix it: How to fix common Payroll errors in QuickBooks.

You may find the following articles helpful. It provides an overview in case payroll items/taxes are calculating incorrectly:

Let me know in the comment section if you have other payroll questions or concerns. I’ll get back to answer them for you. Have a good one.

A

Andrew Gilmore

I know this is a little old, but I have something of value to input. We've noticed that employees using the 2020 or later W-4 do not have federal taxes withheld until some threshhold is met. We've had a few employees that have a couple children and start in the last quarter of the year have zero federal taxes withheld their first years and have similar underpayment issues come tax time.

R

riversidecemetery

I think Quickbooks needs to make it possible to switch back to the older version of the W4 because this new one is NOT WORKING the way it should. It is screwing people over and it needs fixed.

T

Thisguy2

So, apparently this is still a problem, and a problem I don't understand. I have hired multiple employees over the past year. It seems that only employees from a different county than most aren't paying FIT. I have one employee grossing $1000+ per week that hasn't had a single cent taken out in FIT. He and I are both concerned about tax time. Has anyone found a resolution other than "additional deductions"? Thank you in advance!

Rainflurry

@Thisguy2

Employees can make over $1,000/wk (or more) and pay $0 in FIT. It all depends on their situation. How did your employee complete their W-4:

What is their filing status from Step 1 of their W-2? MFJ? HoH?

Did they check the box in Step 2?

What is the total from Step 3 (Dependents)?

Any adjustments from Step 4?

It is not unusual for taxpayers, especially those that file MFJ (or HoH) and have dependents, to make well over $1,000/wk and pay $0 in FIT.

N

nbartnik

Can I add a little insight here? When the IRS changed the form they want your employees to decide if they want more money in their paycheck or a bigger refund at the end of the year. So if they opt for more money in the check then YES they will owe more. Discuss with your employees this fact and if they want to they can have an extra amount with held. Everyone is so quick to blame QuickBooks and customer service and they don't take the time to really find out what is going on. It is not the customer service reps job to do this, YOU ARE IN CHARGE OF YOUR PAYROLL AND SHOULD BE UP TO DATE ON THIS INFORMATION! You all should be ashamed of the way you treat QuickBooks Reps.

D

dmartinez

Here I am too with the same situation! Calculation was way off in the online version for everyone in my company. Called for help and nothing!!!!!!! So frustrating. Anyone else have recommendations for better payroll service?

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