QB quit deducting federal taxes from an employee... how do I fix this?

Hello primecontracting!

Thanks for reaching out to us. Let me share some details about payroll tax calculations.

QuickBooks Online calculates the federal withholding based on these factors:

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

It could be that the employee may not meet the taxable wage base required by the IRS. You'll want to check the guide from IRS: Publication 15 2021,(Circular E), Employer's Tax Guide.

Another reason is that the employee is set to 'Do Not Withhold' by mistake. Here's how to check and update it.

1. From the Payroll menu, select the employee's name.
2. Click Edit employee. Under the What are [employee's name] withholdings section, tap the Pencil icon.
3. Make sure the federal status is not Do No Withhold (exempt).
4. Tap Done to save it.

We also have to consider the wage base limit. It is the maximum wage subject to the tax for the year. Please check this article for your reference: Payroll tax wage bases and limits.

You'll want to run the Payroll Tax and Wage Summary report to see the wage base limit. Search and pull up this report on the Reports menu.

Need to file and pay taxes? Check this link: Get answers to your payroll tax payment and filing questions.

Comment below if you need anything else. Have a great day!