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August 22, 2022
Question

My QB Desktop 2019 has stopped deducting federal withholding tax from employee paychecks, but still deducts medicare and social security. Is there any way to correct this to deduct withholding as well?

  • August 22, 2022
  • 1 reply
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1 reply

MichelleBh
August 23, 2022

I'm delighted to have you here, @Brent55.

 

I'd be happy to explain why the federal taxes are improperly withheld on the payroll you processed. 

 

Here are the possible reasons why QuickBooks aren't calculating withholding tax:

  • The total annual salary exceeds the salary limit.
  • The gross wages of the employee's last payroll are too low.
  • Withholding tax was twice deducted from the preceding paycheck. I'd recommend running the Payroll Summary report to verify this. 
  • Ensure to run the latest payroll update to keep your taxes updated.

 

In addition, QuickBooks uses the following criteria to calculate federal withholding:

 

  • Taxable Wages
  • Number of allowances/dependents
  • Pay frequency
  • Filing status

 

I'd suggest checking the federal withholding settings to ensure they're configured properly. To review your employees' payroll information, here's how:

 

  1. Go to the Employees menu and choose Employee Center.
  2. Double-click the employee's name and select Payroll Info on the left.
  3. Please make sure the Pay Frequency is correct.
  4. Click the Taxes button.
  5. In the Federal tab, review the Filing Status and Allowances fields.
  6. Make the necessary corrections and click OK

 

For the other steps, see this link: Payroll items on a paycheck are not calculating or are calculating incorrectly.

 

If it's within reason, leave it as it is. But if you're sure that the employee should have withholding tax, you have the option to make payroll adjustments

 

To learn more about why taxes are not calculated in QuickBooks Desktop, you can check out these articles:

 

Feel free to click the Reply button if you have other questions about calculating federal withholding in your employee's paycheck. I'm always here to lend a hand.