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Multi-state Withholding

I'm having a difficult time getting a clear answer from Quickbooks as to what payroll service I need for multi-state withholding.  Our service business has employees that work in Kansas and Missouri and are required to withhold tax in each when working in those states.  An employee may work 35 hours in kansas and 5 in Missouri just within one week.  I am not seeing ANY payroll service that is capable of handling this situation.  Any help or advice would be greatly appreciated!

3 Comments
BRC
Established Community Backer ***

Re: Multi-state Withholding

Unfortunately there is no Intuit payroll service that can properly handle this - no matter what support says.

 

It's been a common request for 20 years.

Established Member

Re: Multi-state Withholding

I too, am grappling with this issue. I live on the border of WA and OR, with WA having no income tax, and Oregon having income tax and requiring withholding for employees that earn more than a couple thousand dollars throughout a year in Oregon. We have many jobs (construction) in Oregon, and will continue to do so. I even called ADP, and their basic service also does not offer multi-state payroll. To get that level of service with ADP you must have at least 25 employees. We have just 2 employees. All is not lost, however: After an Intuit "Payroll expert" flatly told me that NO QB Payroll service accommodates multi-state payroll, I closed that chat and proceeded to set it up as follows: The work-around solution is to simply set up 2 employees of the same name. You will have to differentiate them as follows (add a code enclosed with [for example in my case {OR}] in the last name. Put the full real name in the Legal Name field. Simply enter the hours for each state in the applicable employee. The employee will receive 2 paychecks per pay period that they work in two (or more) states. At the end of the year they receive a W-2 for each state they worked in. Dang, I should bill Intuit a fat consulting fee for this advice on how to use their product to accomplish something that "people have been asking for for 20 years." :-)

Experienced Member

Re: Multi-state Withholding

Thanks for your answer -- creativity is appreciated. For how long have you been managing it that way? are there any other issues or problems to watch for?