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TILCjoplin
January 23, 2025
Question

MO W4 tax entry for employee

  • January 23, 2025
  • 1 reply
  • 0 views

Hello.  I am using QB Premier Plus 2024 Desktop; all payroll updates have been installed.

I have a new employee that has completed her MO W4 (most recent state form) and opted to enter a "Reduced Withholding" (line 3).  The state tax tab with Missouri chosen does not have a place to enter the information from line 3 on the W4.  I have asked many people and gotten several different answers, the seemingly most accurate would be to mark that employee as exempt to prevent withholding, which is in essence reducing withholding.  (The employee's weekly wages will come nowhere close to accruing MO Tax liability in the amount of reduced withholding that was marked on the form.)  I hope this makes sense.  Any help would be appreciated.

1 reply

G
GilbertFox33
January 23, 2025

Hello,

 

QuickBooks Desktop doesn't have a specific field to directly enter Reduced Withholding from Line 3 of the MO W-4. This is a known limitation in the software since state-specific adjustments often require workarounds.

 

While marking the employee as exempt may seem like a quick fix, it may not be the best approach unless the employee has explicitly stated exemption on their W-4. Reduced Withholding doesn't mean full exemption, it simply adjusts the amount withheld.

 

Here is one workaround:
1. You can manually adjust the withholding amount for Missouri taxes during payroll setup for that employee.
2. Go to Employees -> Employee Center -> Edit Employee -> Payroll Info -> Taxes -> State (MO)
3. In the Override section, enter a reduced flat withholding amount that aligns with the employee’s request on Line 3 of the W-4.

 

If you want to avoid overriding the settings, consider calculating the reduced amount externally and using a deduction or payroll item adjustment. However, this may involve manual tracking for accuracy.

 

This should help

    R
    Rea_M
    January 23, 2025

    Hello and welcome to the QuickBooks Community, TILCjoplin! I’m thrilled to see you making your first post. Maintaining compliance with state regulations, particularly in accurately setting up employees' MO W-4, is vital for a smooth payroll process. I'm here to ensure you choose the right data, so their taxes are tracked correctly.

     

    We recognize the relevance of having a specific field to enter Reduced Withholding from Line 3 of the MO W-4. I agree with @GilbertFox33's inputs. You can manually adjust the withholding amount for state taxes in the employee setup or calculate the reduced amount using a deduction or payroll item adjustment. Since this feature is currently unavailable, these options would be an alternative.

     

    If you opt to adjust the withholding amount in the employee setup, follow these steps:

     

    1. Go to Employees, then select Employee Center.
    2. If you’re adding a new employee, pick New Employee and double-click their name from the list if they're existing.
    3. Choose the Payroll Info tab and hit the Taxes button.  
    4. Hit the State tab.
    5. In the State Subject to Withholding section, pick the appropriate Filing Status and indicate the reduced amount as negative in the Extra Withholding field.
    6. Click OK twice.  

     

    If you decide to calculate the reduced amount using a deduction or payroll item, you can manually override the details during your payroll process. Please keep in mind that this approach may require careful manual tracking to ensure accuracy.

     

    Additionally, whenever you're ready to file your state payroll tax forms and make electronic payments, I recommend checking out this helpful article: E-file and e-pay state forms and taxes in QuickBooks Desktop Payroll. It provides a detailed, step-by-step guide that will simplify the process for you.

     

    I am committed to providing customized solutions that align with your payroll needs, especially as you set up employee state withholding details in QuickBooks. Your concerns are significant to us TILCjoplin, so please feel free to reach out anytime you need support. Have a wonderful day ahead!

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