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DS127
November 15, 2022
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Local EIT setup screen in QBO - what do the boxes mean

  • November 15, 2022
  • 1 reply
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I've asked this before but never received an answer to the actual question.  This concerns the Payroll (PR) setup screen for Local payroll withholding taxes ("EIT").  I am NOT talking about state.

 

In PA where my client is, we must withhold at the higher tax rate of where he/she works vs where he/she lives. I know what those rates are, and I know what to do.

 

What I continue to be puzzled about is which boxes to check off on the screen.  See my attached screenshot. There are 4 places to tick off under the Local Taxes section.  The first one is, where the employee lives or works?  It appears to be where he lives (Townville). The biz is located in Conneaut Lake. Is that right?  Then the heading "PA School District Taxes".  The next line shows two circle check boxes, one that says "None" and the other that says, "Penncrest SD, Crawford County" with the PSD.  Then there's a square box under that which says "Conneaut Lake, Crawford County".   In his case, the tax rate where he lives is the prevailing one.  Is the last box, the square one, where the biz is located, in case I have to withhold at that rate (bc it is higher - that's the rule in PA). I think the boxes need more explanation on the screen. **Note: A QBO PR person told me before that I should check the last box as well. Is that right? What is the reasoning?  Thanks.

Best answer by DS127

Thanks, Glinette, for your reply and answering my question.  I ended up calling Intuit before I saw this. The post you refer to -- I've read it numerous times, but it doesn't actually say what the checkboxes represent. 

 

FWIW, in case it helps anyone else, the Intuit agent is saying (and I've heard this before) that we should always check the last box.  

So folks:

1. Click the first box to confirm where the employee lives.

2. Click the 2nd choice on the next line (the circle) to confirm the school district where he lives.

3. Click the box on the last line to confirm where he works.

The first and last boxes seem superfluous to me bc QBO is pulling this from the employee profile and from the company profile screens. The agent said that QBO will calculate the proper withholding (here in PA, we withhold at the higher of the work vs. residence rate).  Seems to me we shouldn't be ticking these off, but rather be shown where the withholdings are going to.

Maybe this will help someone else.  thanks.

1 reply

G
GlinetteC
November 15, 2022

I appreciate the detailed information you've provided about setting up the local taxes for your employee, DS127.

 

In setting up local tax withholding for your employees, it is important to determine which local taxes your employee are required to.

 

To ensure you get the most accurate local tax jurisdictions, get the physical address for your employees’ home and work locations. If you aren’t sure what city, municipal, or school district taxes your employee should pay:

 

  • Contact your local tax agency
  • Use the local tax resources below 

 

The first one is, where the employee lives or works?

  • Yes, based on your screenshot.

Is the last box, the square one, where the biz is located, in case I have to withhold at that rate (bc it is higher - that's the rule in PA). 

  • This is also a yes.

A QBO PR person told me before that I should check the last box as well. Is that right? What is the reasoning?

  • If applicable. You can click the Learn more link as a guide or consult a tax advisor to ensure our employee's local tax setup is accurate.

I also encourage you to check this article to learn more about setting up employees' local tax withholding: Set up local taxes in QuickBooks Online Payroll.

 

You can post again here with any additional information or questions while doing a task in QBO. The Community is here to help.

D
DS127AuthorAnswer
November 16, 2022

Thanks, Glinette, for your reply and answering my question.  I ended up calling Intuit before I saw this. The post you refer to -- I've read it numerous times, but it doesn't actually say what the checkboxes represent. 

 

FWIW, in case it helps anyone else, the Intuit agent is saying (and I've heard this before) that we should always check the last box.  

So folks:

1. Click the first box to confirm where the employee lives.

2. Click the 2nd choice on the next line (the circle) to confirm the school district where he lives.

3. Click the box on the last line to confirm where he works.

The first and last boxes seem superfluous to me bc QBO is pulling this from the employee profile and from the company profile screens. The agent said that QBO will calculate the proper withholding (here in PA, we withhold at the higher of the work vs. residence rate).  Seems to me we shouldn't be ticking these off, but rather be shown where the withholdings are going to.

Maybe this will help someone else.  thanks.

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