Hi there, jeffspharmacy.
I'm here to help you handle multi-state unemployment setup in QuickBooks Online Payroll.
The state in which your employees reside and work dictates the state payroll taxes that you and your employees must adhere to. These taxes may encompass State Withholding, State Unemployment Insurance, local taxes, State Disability Insurance, and Paid Family Leave.
To proceed with the setup, you can mark the employees' tax-employees on the state they live in. I'll show you how:
- Go to Payroll, then Employees.
- If your employee is new, select Add an employee. If an existing employee moved to a new state, select your employee from the list.
- From Employment details, select Start or Edit. Select or add the work location where you’re required to pay State Unemployment Insurance. If you have remote employees, the work location may be different than where your employee physically works. Then select Save.
- From Tax withholding, select Edit. Go to the State withholding section. If you see two states:
- If you don’t need to collect state withholding in one state: in the Filing Status ▼ dropdown, select Do not withhold (exempt).
- If there’s a reciprocity agreement between the two states, select if your employee gave you a Certificate of Nonresidence form. The form determines which State Withholding is collected.
- If you see a Local Taxes or Other taxes section, select the applicable taxes and enter the rates.
- If you or your employee are exempt from any taxes (not common), from Tax Exemptions, select the applicable tax(es).
- When finished, select Save.
I've also added this awesome article about multi-state employment payroll situations that I'm sure you'll find helpful. In this article, you'll learn about the different multi-state situations with their reciprocity agreements.
I've got your back if you have more questions about managing your payroll in QBO. Just add your reply in the comment section so I can assist you further. Have a good one.
