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Pearl12
Level 1

Multiple State Withholding Tax DESKTOP

I am not sure how to set up the employee profile to withhold payroll taxes from 2 separate states.  I have several employees that live in another state, I understand they should pay to both the state worked and the state in which they reside.  In the profile set up "State Subject to Withholding" only has a single field. 

How do I set up 2 states for withholding tax?

(Quickbooks DESKTOP)

1 Comment 1
JaeAnnC
QuickBooks Team

Multiple State Withholding Tax DESKTOP

Welcome to the QuickBooks Community, @Pearl12.

 

Currently, QuickBooks Desktop (QBDT) doesn't support the option for multiple state unemployment and local withholding on a single paycheck or tax filings. We also don't suggest using any workarounds since it may cause issues with your state tax forms.

 

However, you can use class tracking to record your employees in two locations. Here's how:

 

  1. Go to Edit and select Preferences.
  2. Click Accounting, then Company Preferences.
  3. Select Use class tracking for transactions.
  4. When prompted, select Yes to save changes.
  5. Click Payroll & Employees.
  6. Select Full Payroll in the QuickBooks Payroll Features section.
  7. Select Job Costing, Class, and Item tracking for paycheck expenses.
  8. Choose how you'd like to assign a class: Entire Paycheck or Earnings Item. Click OK.

 

Then, add a class to the paychecks or employee profile. Here's an article for the complete steps: Set up and track your payroll expenses by class.

 

Once done, you may need to manually adjust the paychecks and tax forms. Please check out the Read here about 'roaming employees' section in this link for more information: Set up employees and payroll taxes in a new state.

 

Additionally, you can update your employee's information in QBDT Payroll if they modify their name, bank account, or W-4 filing details.

 

Please don't hesitate to reach out to us if you have further concerns about entering employee information in QBDT. I'm always available in the Community to assist you. Keep safe, and have a good one.

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