Does anyone have issues with state & federal taxes not being taken out of employee paychecks using QuickBooks payroll?

Welcome to the Community, connor.

I'll be sharing information regarding the state and federal taxes withheld for your employees.

In QuickBooks Online, withholding federal and state taxes of employees depends on their tax status. Employees with Exempt or Do not withhold status will not be liable to pay for these taxes.

Therefore, let's ensure setting up the appropriate tax status for your employees. Here's how:

1. Head to Payroll, then Employees.
2. Locate the employee and click on it.
3. Under the Tax withholding section, select Edit.
4. Choose the appropriate option from the Filling Status dropdown for Federal Withholding and State Withholding.
5. Once done, click on Save.

On the other hand, please note that employees who haven't reached the minimum threshold don't have to pay state and federal taxes, even if they're not tax-exempt.

For more information about the discussion above, you can refer to these articles:

• Troubleshoot no income tax withheld from a paycheck
• Understand how your payroll taxes are calculated

Moreover, consider reviewing this material whenever you want to e-pay and e-file payroll taxes within the program: Pay and file payroll taxes and forms electronically in QuickBooks Online Payroll.

Update us in the forum for queries about withholding payroll taxes and other concerns related to QuickBooks Online. We're always around to offer further assistance.

I have had this issue for multiple payrolls now since the update for 2024 taxes. Initially it was one that red flagged as the wrong tax % and was rejected and returned to me. Ever since my payroll has not process any of the necessary taxes. I have been on at least 4 Glance sessions with the help line. The last thing I was told is to hope the update happens for this run..... It did not. One more payroll processed with no taxes being charges or taken from my account, or showing in my files. I need an audit of my payroll at this point to straighten it out. Please send someone who can do that.

Thanks for chiming in and sharing this information with us, @jdjanac.

QuickBooks automatically calculates state and federal taxes when tax wages, number of allowances/dependents, pay frequency, and filing status are correctly configured and verifies if the employee is tagged as tax-exempt.

Once confirmed that the setup is correct and not marked as exempt, I suggest contacting our Payroll Support for additional assistance to conduct a thorough investigation and run an audit to address this promptly.

Here's how:

1. Sign in to your QuickBooks Online company.
2. Go to Help.
3. Select Contact Us.
4. Type in a short description of your concern, then select Let's Talk.

Here's a helpful article to guide you if you're ready to file your forms and taxes: Pay and file payroll taxes and forms electronically.

The Community is always available for any other questions you have about tax calculations. We're here to help. Have a good day ahead.

Yes, just happened to me. My problem is that I've never had any issues with it till last week. The program always deducted the right amount of taxes but 2 weeks ago it didn't deduct anything (to make it even worse I didn't notice) and this week it took out the taxes? 

The only thing I can think of is that I couldn't download the payroll update, but I don't understand why it wouldn't take anything out?

It's essential to verify that the payroll setup is accurate, and that the employee has not been marked as exempt, @pmflooring.

Once the payroll is correctly set up, QuickBooks automatically computes state and federal taxes. If everything is in order, I recommend contacting our support team for assistance. They will conduct a thorough investigation to identify the underlying issue. Let me show you how:
 

1. From the Help menu at the upper right, click the Search tab.
2. Choose Contact Us and type your concern in the What can we help you with?
3. Select Continue.
4. Hit Chat with us or Have us call you.

In addition to managing regular payroll, you may need to track your employees' year-to-date paycheck information and overall company totals.

Feel free to return to this thread for further questions about managing payroll in QuickBooks Online. I'm available around the clock to assist you. Stay safe!

Hi KayePe, So he's been on my payroll for 6 months and I've been on the payroll 15+ years and this was the first time it has ever happened. 

No Federal or State taxes were taken out of the employee's checks.

This has happened before. We pay weekly.

Taxes  were not taken out for the pay period  but the next week paycheck  the taxes were taken for the prior pay period and the current pay period. 

It has happened again on this weeks pay checks no taxes taken out. Been doing payroll on Desktop QuickBooks for a coupe of years and always update.

Why is this happening and how can we fix this problem so that it doesn't happen again?

I appreciate you for joining this thread and letting us know that you're also experiencing the same issue, MedCon24.

There are a few reasons why payroll taxes may not be calculated:

• The total annual salary exceeds the salary limit.
• The gross wages of the employee's last payroll are too low.
• Your payroll tax table is outdated.

If taxes were not deducted and the payroll has already been processed, QuickBooks Desktop usually auto-corrects your payroll by doubling the tax deduction on the next pay run to cover the amount that wasn't deducted from your previous payroll.

To address this, ensure that you update QuickBooks to the latest release and have an updated tax table to ensure taxes are deducted from your paycheck.

If the issue persists, I'd recommend getting in touch with our Payroll Support Team as they have the additional tools to investigate this and process other troubleshooting steps if necessary.

Here's how you can contact them:

1. Open QuickBooks.
2. Go to the Help menu, then select QuickBooks Desktop Help.
3. Click Contact Us.
4. Type in a short description of your concern, then Continue.
5. Choose a way to connect with support.

To ensure that you'll be assisted immediately, I recommend checking our support hours before performing the steps.

In addition, QuickBooks offers a variety of reports for payroll to help you manage and track employee expenses. Please refer to this article for more details: Customize Payroll And Employee Reports.

Furthermore, feel free to explore this article to assist you in printing, generating, and customizing accessible payroll reports to gain a more detailed understanding of your company's financial situation: Run payroll reports in QuickBooks Desktop Payroll.

If you have any questions about payroll deductions, don't hesitate to reach out. I'm here to help you.

Where do you find the salary limits?  All of our employees are not having an deductions automatically calculated in Quickbooks Enterprise online.  I have been manually figuring out taxes, social security and medicare deductions just to complete your paychecks.  We are on the most current version of the tax table and we keep doing these updates, they say they're done, but every time we go into Payroll Center and try to open the next scheduled payroll, it keeps asking us to get updates.  Not sure what else we can do and QB support has not been very helpful nor Right Works either.

I comprehend how overwhelming it can be to navigate tax and deduction issues, Mary. I want to acknowledge the effort you've put into addressing this problem.

As mentioned, there are a few reasons why payroll taxes may not be calculated:

• The total annual salary exceeds the salary limit.
• The gross wages of the employee's last payroll are too low.
• Your payroll tax table is outdated.

To gain a better understanding of your employee wage base limits, you can refer to the article:  Understand payroll tax wage bases and limits.

Also, despite having an up-to-date QuickBooks Desktop program and tax table, you're still prompted to get updates when opening the next scheduled payroll in the payroll center.

While you've already contacted the payroll support and the Right Networks team, I'd still recommend contacting the Right Networks again, as they possess the authority to ensure that your QuickBooks program receives the latest release update.

It might also be beneficial to arrange a 3-way call with our Payroll support team and the Right Networks for a joint effort to investigate this matter further and find a resolution that works for you.

Furthermore, I'd like to provide you with some helpful articles that will assist you in managing your pay types, deductions, and contributions all in one place, as well as guide you on managing your payroll reports for a closer look at your finances:

• Run payroll reports
• Set up, change, or delete employee-paid payroll deductions

I'll be available on this thread whenever you need additional assistance with managing payroll or anything else. Feel free to provide more details below.