How do I use our Tax Penalty Protection for a penalty from State of AL for late withholding taxes? What is next?

Thanks for reaching out to us here today, @Elaine181.

I'll share the steps on how you can record your state tax penalty. When dealing with penalties and interest paid to the tax agencies, you should not record these together with the tax due. It will result in an overpayment. You have to record these payments as expenses in QuickBooks Online (QBO).

Here's how:

1. Go to Taxes, then select Payroll tax.
2. Chose the Enter prior tax history link, and then tap Add Payment.
3. Pick AL Income Tax from the Tax Type drop-down. Then, enter your penalty details.
4. Click OK.

For more information about the prior tax payment, check out this guide: Recording prior tax payments.

Additionally, here's a link that covers all the tasks you can do when using the payroll feature: View all help for QuickBooks Online Payroll.

If you still have questions or concerns about the tax payments, please let me know. I'm always here for you. Take care and be safe.