How to stop state tax reporting for inactive states.

Hello 1762832,

Welcome to the QuickBooks Community! I will be happy to help you. To make changes for that employee, you would need to edit their profile in QuickBooks Online. Here's how:

1. Go to the Payroll menu.
2. Select the Employees tab.
3. Click the name of the employee.
4. Select Edit, under the Tax withholding section.
5. Make the necessary changes.
6. When you're done, press Save.

Drop your reply below if you have any other questions about state tax. I'll always be right here to help.

To say your response was incomplete is to be nice.

In #5, you state to "make the necessary changes".  What changes should I make?  The employees that lived in other states no longer works for the company. Why does that employer have to make changes to a terminated employee's record?

I want QBO to stop notifying the employer it has to file withholding reports to the other states since the company no longer has the filing requirements (no employees from that state).

Good morning, @1762832. 

Thanks for chiming back in on your thread. 

We understand how frustrating and time consuming this must be. However, let's try to make certain work locations inactive to resolve this problem: 

1. Go to the Gear icon.
2. Click Payroll Settings.
3. Under Company and Account, click Work Locations.
4. Select Work Locations.
5. Mark the Inactive checkbox.
6. Tap Save.

If the steps above don't work within your account, we recommend getting in touch with our Customer Support Team so they can review your account with you.

Feel free to reach back out if you have any other questions or concerns. We're only a post away! 

Again, your response is incomplete.

Previous experience with QB payroll, the agents don't understand the tax withholding requirements with MD and the neighboring states.  The company only has one location.  The employees travel from another state (PA) to the company's location (MD).  The company elected to withhold PA taxes for the employee and remit the same.  There is no other "work location" to make inactive. 

Without making inactive a non-existing work location, how can I get QB to stop issuing filing notifications for the other states?

Managing state tax requirements correctly is vital for your operations. I understand the importance of this issue and the impact it can have on your business, 1762832. To rectify this, you can exempt your employee from state tax. Allow me to share the details below.

It's possible that the terminated employee still has pending state taxes, which is why it is still being reported. You'll need to reactivate the employee and set their state tax to exempt.

First, change the employee's status from terminated to active. After that, you can now make changes to their state tax. Here's how:

1. Go to Payroll, then Employees.
2. Find the employee.
3. In the Tax withholdings, select Edit.
4. Under the State withholding, click the dropdown in the Filing status.
5. Choose the Do not withhold (exempt) option.
6. Once done, hit Save.
    
   
   

If the issue persists after doing the steps above, I recommend reaching out to our Live Support Team. They have the tools needed to conduct further investigation and use screen sharing to assist with QuickBooks navigation more effectively.

Additionally, you can run payroll reports to analyze payroll data for better business and financial management.

We're here to ensure your payroll process runs smoothly and efficiently. If you have any follow-up questions or need further clarification with taxes, feel free to share them below. I'll make sure to respond promptly and assist you further.