Skip to main content
J
jrq
May 1, 2022
Question

QuickBooks Online. Withholding out of state payroll taxes

  • May 1, 2022
  • 1 reply
  • 0 views

Company is based in New York State. Employee lives and works in Florida, but has to pay NYS withholding. When I look at employee details, there is no option for state withholding (Florida has no income tax). How do I add New York State withholding?

    1 reply

    MaryLandT
    MaryLandT
    May 2, 2022

    Thank you for contacting us about setting up the Florida Income Tax on the employee's profile, @jrq

     

    According to the reciprocity agreement from the Multi-state withholding matrix, there's no income tax for Florida. You may refer to this link for additional information: Withholding rules by state.

     

    In QuickBooks, we stay compliant with your state's regulations. And, here's how to add the tax once you determine the state taxes you’re responsible for.

     

    1. Go to Payroll from the left menu, then Employees. 
    2. Select the employee from the list. 
    3. From the Employment details section, select or add the work location where you’re required to pay State Unemployment Insurance.  This might be different than where your employee physically works. 
    4. In the Tax withholding section, scroll to the State withholding section. If you see two states:
      • If your employee isn’t subject to or you aren’t required to collect state withholding for one of the states, in the Filing Status drop-down ▼, select Do not withhold (exempt). 
      • If there’s a reciprocity agreement between the two states, select whether or not your employee provided you a Certificate of Nonresidence. This determines which State Withholding is collected. 
    5. If you see a Local Taxes or Other taxes section, select the applicable taxes and/or enter the rates. 
    6. If you or your employee are exempt from any taxes (not common), from Tax Exemptions, select the applicable tax(es). 
    7. When finished, click Done. 

     

    This article is another great resource to know more about multi-state employment payroll situations in QuickBooks: Set up employees and payroll taxes in a new state. 

     

    If you aren't sure about the setup, you may reach out to your accountant. This is to make sure your QuickBooks account has accurate tax calculations and your returns are correct.

     

    Stay in touch with me if there's anything else you need by commenting below. I'll be around whenever you have follow-up questions about the state payroll taxes.

    C
    CharlesAble
    July 7, 2023

    The answer is incorrect depending on the situation (convenience of employer tests and remote workers).   NYS law requires the employer to withhold state tax from the employees working/living out of state and then the employee must file a non-resident return and request all of the withholding back as a refund. I believe this is also the same for California and Massachusetts.

    That being said, we need the option to withhold state tax in your system regardless of the address of the employee.

    Nicole_N
    Nicole_N
    July 7, 2023

    I appreciate you joining the thread, CharlesAble. Let me share a few things about withholding state tax.

     

    You can set up local tax withholding for your employee by adding their work location. It determines the correct state and local payroll taxes to collect.

     

    To do so, go to the Payroll menu, then Employees. From the Employment details, click Start or Edit. Then click the pencil icon to edit or add the work location. 

     

    Moreover, the option to withhold state tax regardless of the employee's address is unavailable in QuickBooks Online. With this, I recommend sending feedback to our product developers. This way, they can further review which parts of the program need enhancements and consider adding them to future updates. Please refer to the steps below:

     

    1. Go to the Gear icon and click Feedback.
    2. Provide your feedback or product suggestions.
    3. Click Next to submit.

     

    To get updates about the status of your feedback, you may visit the Customer Feedback page.

     

    Here are some articles you can use in the future to achieve tasks about payroll taxes: 

     

     

    Keep us posted if you have other questions or concerns about state payroll taxes. The Community team is always around to help. 

    Terms & ConditionsAccessibility statement