One of the employees do not have a Federal witholding tax deduction, what is the explanation

Hi there, @ChinaTrip2020.

Thank you for posting here in the Community. I want to make sure the employee's federal taxes will deduct from the paycheck.

We have possible reasons the federal taxes wouldn't deduct from your employee's payroll.

• Your employees' payroll taxes are not set up in their profiles

• Were set to Do No Withhold

• The gross wage of the employees are too low

Let's go to the employee's profile to check the setup. Here's how:

1. Go to the Payroll menu, and then select Employees. 

2. Double click the name and click the Edit button beside Pay.

3. Hit the Pencil icon perpendicular in the What is [employee's name] withholdings?.

4. Make sure the federal status is not Do No Withhold.

For more information about the process, check out this article: 0.00 or no income tax withheld from the paycheck.

Once you've verified that the setup is correct, I suggest checking the Payroll Tax and Wage Summary report. It has information on how QuickBooks calculates tax amounts on employee paychecks and the wage base limit for each employee's tax.

Let me guide how:

1. Go to the Reports tab located on the left pane. 

2. Type Payroll Tax and Wage Summary in the search box and enter. 

3. Customize the Date range and hit Run Report. 

4. Click the Federal Income tax under Federal Taxes (940/941).

For the detailed guide, you can use this article: Payroll tax wage bases and limits.

Please browse through this article: Set up payroll. This link contains the steps on how to complete Form W-4, adding pay type, and other related topics in QuickBooks Online Payroll.

Let me know if you have follow-up questions. I'm always here to help. 

Hi, @ChinaTrip2020.

Hope you’re doing great. I wanted to see how everything is going about the federal withholding tax you had the other day. Was it resolved? Do you need any additional help or clarification? If you do, just let me know. I’d be happy to help you at any time.

Looking forward to your reply. Have a pleasant day ahead!

no it is not resolved

not resolved

Thanks for following this thread, georgetsch.

I want to ensure the federal withholding is deducted from your employees’ paychecks.

Have you tried the workaround steps above provided by my colleague above? Can I also ask for a screenshot of what you are viewing from your end? Any further details would be much appreciated for me to narrow down this issue.

For future reference, I've attached a link you can use to learn how to access state agency websites, as well as some information about the federal payroll tax compliance: Payroll Tax Compliance Links.

Please continue to add another reply if you still need help with your payroll. The Community is always here for you.

@georgetsch 

This is a very common question on this forum and the answer has always been because the employee either has inadequate income or deductions that are high enough that they have zero federal withholding.  This is not unusual.  When the Tax Cut and Jobs Act went into effect, W-2 employees were found to be having too much withholding generally. The W-4 was updated for 2020 and that really reduced many employees withholding - especially taxpayers with dependents.