I was told I need to keep employees active (even if they are no longer active) in order to process payroll taxes through the end of the year. Is this accurate?

Hello there, scotley.

Regardless of the employees' employment statuses, you can process payroll taxes at the end of the year as long as your payroll subscription is active. Your employees' records will remain in the system for the year-end filing of payroll forms. 

In case you don't have active employees anymore and you canceled your payroll subscription already, you can reactivate it at the end of the year to process your payroll taxes and forms.

For your reference, I have added some articles that will help you manage your employees and payroll taxes using QuickBooks:

• Set up employees and payroll taxes in a new state
• Set up local taxes in QuickBooks Online Payroll
• Set up, change, or delete employee-paid payroll deductions

Please know you're always welcome to post other questions in the Community. Have a great day ahead.

Does anyone else feel like this is completely absurd??  How do you keep your bookkeeping accurate and up to date if you have to keep inactive employees active?

Hi Aileen, this is just not true. Please re check and edit the post of yours.  Tax payments happen regardless of employee status.