Local tax deduction for employees

Hi there, @jitw.

Thanks for sharing your concern in the Community. I understand we need to have the right calculation on your employees' local tax deductions. 

In QuickBooks Desktop (QBDT) we always recommend updating your tax table every time you pay your employees so you'll have the latest payroll update. 

First off, let's ensure that your QuickBooks is updated to the latest release. Here's how: 

1. Close your company files and QuickBooks.
2. Open the Windows Start menu, then search for QuickBooks Desktop.
3. Right-click the icon, then select Run as administrator.
4. Go to the Help menu, then select Update QuickBooks Desktop.
5. Click the Options tab, then select Mark All and click Save.
6. Select the Update Now tab, then click the Reset Update checkbox and click Get Updates.
7. Close and reopen QuickBooks Desktop. Then, click Yes to install the updates. 

Once done, restart your computer. Then, proceed to download the latest payroll tax table to get your payroll taxes calculated correctly. 

As an additional reference, check out the wage calculation table of FIT in this link: IRS Pub 15, as well as the SIT to the State Withholding calculation table in your State Agency's website.

I'm also sharing this article that you can read through: How QuickBooks Desktop Payroll calculates the employee's withholding. It includes a better explanation about how the tax amounts are reported on your employees' paychecks.

Let me know if there's anything else that you need. We're always delighted to help.

Have you resolved this? I've been having this issue also. It looks like 2 of the 7 employees are having their local deducted correctly. With mine, it will deduct the incorrect amount every pay up to November and December, when both months of pay are deducted correctly.

I appreciate you joining the thread, @ENS. It's my priority to help you get the correct calculation of your employees' local taxes in QuickBooks Desktop (QBDT). Let me share some troubleshooting steps to isolate this behavior.

First, I suggest you revisit your employees' setup. Ensure that every detail is accurate to avoid incorrect calculations.

Here's how:

1. Open your QBDT file.
2. Go to the Employees menu, then click on Employees Center.
3. Select the employee's name at the left pane, then Edit.
4. Examine the employee's tax setup from the Payroll Info section.
5. Hit OK when finish.

You may also check the local tax deduction from the Payroll Item window to review its setup, especially the rate and amount.

1. Go to the Lists menu, then Payroll Item List.
2. Locate the tax deduction.
3. Modify the information if you need to.

This article will give you more details about your company and employees' local tax withholding: Set up local taxes in QuickBooks Desktop Payroll.

If everything is all set, I recommend updating your payroll tax table version to stay compliant with your paycheck calculations.

1. Go to the Employees, then select Get Payroll Updates.
2. Select Download Entire Update.
3. Tap Update. An informational window appears when the download is complete.

You can also open these links for more information: 

• Get the latest tax table update in QuickBooks Desktop Payroll
• Get the latest payroll news and updates in QuickBooks Desktop Payroll

Let me know in the comment section below if you have other payroll questions. I'm always here to help. Have a good one!

@Angelyn_T 

I've gone through each employee and checked that the correct percentage is in their tax profile. Next, I made sure about all updates and I have all the current updates. When checking the local tax deduction from the Payroll Item, I leave where the percentage to be at 0 because some employees have different rates.

I do not know why it won't take out the correct percentage.

Thanks for coming back to the Community, ENS. 

I appreciate all your efforts in trying to fix the issue and sharing with us the result. Let me guide you in the right direction to get back on track in QuickBooks Desktop (QBDT). 

I'd suggest contacting our Support Team. They'll pull up your account in a secure environment and investigate what's causing this issue. 

Here's how to reach them:

1. Open QuickBooks.
2. Go to Help, then select QuickBooks Desktop Help.
3. Select Contact Us.
4. Give a brief description of your issue, then select Let's talk, and then choose a way to connect. Phone support may be limited due to volume.
5.  

To make sure you get prioritized on your concern. Please check out our support hours and contact us at a time convenient: Support hours and types.

I've added this article about calculating payroll taxes in QBDT: How QuickBooks calculates payroll taxes.

Fill me in if you have additional questions concerning tracking local taxes. I'm always here to help. Take care always.