According to tax rules, employers need to set up those taxes in the payroll software. QuickBooks Desktop Payroll program is unable to suggest how to tax and report wages of employees. For Basic, Assisted, Standard, and Enhanced QuickBooks Payroll subscriptions, setup state taxes in QuickBooks Payroll.
Get New State Account Numbers Through proper Applications
To setup state taxes in QuickBooks Payroll, employers need state Tax account numbers. That will enable tax payments and form submissions. Here is a list of relevant information to set up taxes in QuickBooks Payroll:
Local Employee Taxes
- Tax account number
- The interval of tax payment
- Tax rates
State Unemployment Insurance (SUI)
- Account number for taxation
- The rate for State Unemployment Insurance (SUI) tax
- Any surcharge rate as per applicability
Paid Family Leave or State Disability Taxes
- Tax account number
- Tax rates
Income Tax or Withholding
- State tax account number
- Tax payment frequency to the tax authority
The Effortless Steps to Setup State Taxes in QuickBooks Payroll
The QuickBooks Payroll solution will allow setting up taxes without the account numbers. When the account numbers are available, update those in the software. The program may not be able to file any forms or pay taxes if account numbers are missing. Followings are the steps to setup state taxes in QuickBooks Payroll in multiple QuickBooks Payroll versions:
QuickBooks Payroll for Desktop Computers
- Open the QuickBooks Payroll application on the desktop.
- Click on “Employees,” and then choose “Employee Center.”
- Now select “New Employee” and then complete the employee info entry.
- Then choose the “Payroll Info” tab, then click on “Taxes.”
- Now click on the “State” tab and choose the relevant “State Worked” and “State Subject to Withholding or Income Tax.”
- You’ll then notice a prompt to set up the state tax item. Click on “Set up.”
- The state setup wizard will guide the user throughout the setup. Now select “Finish.” These fields may be left blank if tax is not applicable.
- Click on the “Other” tab. You could see a prompt to enter an extra state tax item. Enter details as per your state tax laws.
- Now get back to the “Other” tab and select “Ok.” This field is for any surcharges or tagalongs, or other taxes for that state. The state tax authority will share the details. If applicable, enter surcharge details here.
- If the employee needs to pay one or more state taxes, click on “Yes.” Now from the “Other” tab, remove those which do not apply. To do that, select the items, and then click “Delete.’
- But, if the worker is not subject to any additional taxes, select “No.”
Setup local tax items if employees are subject to local taxes. Here are the steps:
- Go to the “Other” tab, click on any empty area inside the “Item Name” section. Click on the dropdown, then choose “Add New.”
- Now, follow the setup wizard to choose the local tax type, enter the tax account number, and rates as applicable.
Note: Employers need to pay local taxes and submit local tax forms directly to the authorities. The program currently does not support local tax filings or payments.
Above are steps to setup state taxes in QuickBooks Payroll on desktop QuickBooks Payroll.
QuickBooks Payroll Online
- Click on “Settings,” and then select “Payroll Settings.”
- The box that says “State Tax,” click on “Edit” on the new state.
- Make entry of the info relevant to the payable taxes.
- If not eligible to pay a tax, keep the account number field empty and type in “0” for any tax rates.
- If the employee needs to pay local taxes, click on “Settings” and then select “Payroll Settings.”
- Now tap on “Local Tax Jurisdictions.”
- If the section is not available, you may contact QuickBooks payroll support for local taxes setup help.
- Now fill in the tax account number and tax payment frequency. If such taxes do not apply, keep the account number field empty.
If the “State Tax” section is not visible in the payroll settings, try the followings:
- Click on “Payroll” and then select “Overview.”
- From the “To-Do List,” search for the “Provide Critical Tax Info ASAP Task” and then click on “Let’s Go.”
- Now once again, choose “Provide Critical Tax Info ASAP Task.” Enter the details relevant to the applicable taxes.
- Keep the account number blank and put “0” on the rates section if taxes do not apply.
These are steps to setup state taxes in QuickBooks Payroll on online QuickBooks Payroll.
QuickBooks Payroll automates the entire payroll processing, including the taxes. To setup state taxes in QuickBooks Payroll is relatively easy. Go through the steps to set up your employee state taxes.