I have an employee who lives in PA his unemployment insurance gets paid to MD. How can I skip the PA unemployment Insurance?

Welcome to the Community, vsebold. I'm here to share some insights into setting up State Unemployment insurance in QuickBooks Online Payroll.

Normally, QuickBooks won't allow you to skip the payroll tax setup when adding a new employee. This is to ensure that the proper taxes are collected.

Every situation and state is different, and determining the correct state and local taxes can be also tricky. Some states have reciprocity agreements, which may require you to include or exempt you from state unemployment insurance.

With that, I recommend contacting the state withholding and unemployment insurance agencies first before proceeding with the payroll setup, as well as any applicable local tax agencies where your employees live and work. They can provide more information about which taxes apply to you and your employee's situation.

Furthermore, your employee may also need to contact the state of Pennsylvania since there's a reciprocal agreement between the two states. Once your employee confirms and obtains the necessary documentation to prove their exemption, you can set the employee's Filing Status to Do not withhold (exempt) and proceed with the payroll setup.

I'm adding this article for more information about the steps: Set up employees and payroll taxes in a new state.

Additionally, you can check out this link to learn how to set up local taxes in QuickBooks Online Payroll.

Let me know if you have questions or other payroll-related concerns. I'll be here to help you out. Take care!