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p62484c
April 14, 2021
Question

Why would an employee not be getting federal witholding. They are married filing jointly.

  • April 14, 2021
  • 1 reply
  • 0 views
Employee was paid weekly at $11/hour (avg check was $440 with a net of $397. No federal income tax was ever witheld.

1 reply

Rubielyn_J
Rubielyn_J
April 14, 2021

Let me share with you some information on why no income tax was withheld from your employee, @p62484c.

 

Federal and state income taxes are withheld per IRS Publication (Circular E), Employer Tax Guide. If a paycheck shows $ 0.00 or no withheld income tax, it could be due to any of the following reasons:

 

  • They are not meeting the taxable wage base
  • They were set to Do Not Withhold for federal and state income taxes in the employee setup.

 

To fix this, review their gross pay and tax status. This is to verify that they meet the taxable wage base to have income tax withheld from their paycheck. For more information about the percentage method set by IRS, you can go to page 6 on this link: https://www.irs.gov/pub/irs-pdf/p15t.pdf.

 

Next is to set an employee’s preference to Do Not Withhold if they explicitly claim exemption from withholding on their Federal Form W-4 or any state form. Here's how to check if an employee was set to Do Not Withhold:

 

  1. Go to the Payroll menu, then select Employees.
  2. Click the name of the employee.



  3. Choose the edit (pencil) icon beside Pay.



  5. Next to the withholding section, click the edit (pencil) icon.
  6. Check the Federal Filing Status/State Filing Status.

 

You can change the employee's status to withhold taxes accordingly.

 

I'm also adding this article to learn about federal and state payroll wage bases and limits. 

 

You can tag me if you have more questions about federal and state income tax. I'll help you in any way I can. Have a wonderful day.

P
p62484cAuthor
April 14, 2021

Thanks so much for the response!  Could this be due to the employees age?  The employee is over 65 and I saw something about older workers not being charged Federal income tax until they meet a threshold?

 

Thanks!

 

Tim

R
Ryan_M
April 14, 2021

Hi @p62484c,

 

I appreciate your prompt reply.

 

What you said is correct. An employee that's 65 years old, married, filing jointly, and make less than $27,000 combined can stop filing income taxes. 

 

To remain compliant with payroll taxes, you can take a look at this article: Payroll Tax Compliance Links. Search for the correct state, and look over the Withholdings section for additional information. 

 

Let me know in the comments below if you have other questions about payroll taxes in QuickBooks Online. I'll take care of them for you. 

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