I had city tax taken out of an employee’s check but found out I do not need to pay city. The money was with held from employees check but QB could not pay anything. HELP

Hello, @bossappliance614.

Let me provide some information about employee tax in QuickBooks Online.

Currently, QuickBooks will unable to process a refund since it's already deducted from the employee's previous paycheck. 

With this, I'd suggest creating a reimbursement for that employee. For more information, check out this page: Reimburse an employee.

But before doing that, let's change first the employee tax status to Do not withhold. So, there's no amount will be deducted from the employee paycheck moving forward. 

Here's how: 

1. Go to the Payroll menu, then choose Employees.
2. Select the name of the employee.
3. Click the Edit icon beside Pay.
4. Next to the withholding section, hit the pencil icon.
5. Pick Do not withhold the Federal Filing Status/State Filing Status.
6. Tap OK. 

You may refer to this article: Employee payroll tax exemptions.

You also have an option to communicate with either our Customer Care Team or directly to the IRS to ask how the refund works or other workarounds. 

Here's how to reach out to our support: 

1. Go to the Help menu, then click Contact Us. 
2. Type your concern in the box and tap Let's talk. 
3. Choose either Get a call or Start a chat. 
4. Complete the required data and submit the request.

Please call them within business hours to ensure we cater to your concern quickly. 

Please browse through this article about handling your taxes, employee data, and other related topics.

• QuickBooks Online Payroll Full Service Hub
• Taxes

Let me know how the call goes. Always remember that I'm always here, ready to help. Keep safe.