Thanks for joining in on this thread, Marian0122.

As per my colleague JasroV provided, there are situations that can cause the federal taxes not to withhold. Here are the following:

• Agency's wage and tax calculation table which is updated by the Tax Table.
• Pay Frequency, Filing Status, number of allowances.
• Gross Wages - creating paycheck with wages that has lesser or larger amount than what employee normally gets in a pay period.

Since you have the updated payroll tax table, It'd be best to reach out to our Customer Care Team. They can check your payroll setup and investigate what's causing the taxes to not calculate on the paychecks.

Here's how:

1. In your QuickBooks Desktop program, go to Help > QuickBooks Desktop Help.
2. In the Have a Question window, click the Contact Us link at the bottom.
3. From the Contact Us page, select any topics.
4. Under Here's how to connect with a QuickBooks expert section, click the Start a Message or Get Phone Number button.

To view the QuickBooks Desktop articles and guides, feel free to visit our general help topics page.

You're always welcome to post here if you have any additional questions or other concerns with your QuickBooks Desktop account. Take care and stay safe!

We've had this problem for over a year.  None of our payroll has federal taxes taken out.  We've done everything all these forums recommend, but nothing works.  This year, we're doing the steps of manually doing the transactions but it makes me angry that I pay $400+ a year to get the tax tables and forms in order to do payroll.  It doesn't work and yet we're not getting any refunds on the full payment of a faulty product.  

Yes this is beyond ridiculous. I shouldn't have to STILL manually calculate federal tax deductions for all employees who used the new W-4.  Nobody under the umbrella of the old W-4 has an issue with their federal taxes.

Hi,

I have a dozen employees, but only 2 file "married filing jointly". Those 2 haven't had any federal tax deducted for the year. I have checked all their employee withholding settings and they are correct. Any ideas why Federal tax isn't being withheld?

Michelle

Let's make sure payroll taxes are withheld correctly, themopsquad5.

Ideally, Federal and State Income Tax (FIT and SIT) amount calculations are determined based on taxable wages, the number of allowances/dependents, pay frequency, and filing status. QuickBooks doesn't calculate federal taxes if: 

• Total annual salary exceeds the salary limit.
• The gross wages of the employees' last payroll are too low.

Ensure to run the latest payroll update to keep your taxes updated. Please check this article for more information: How QuickBooks Calculates Payroll taxes.

However, if this is affecting not only Federal taxes but all your other payroll taxes, you can revalidate the service key , then revert your paychecks. For more information on why payroll items aren't calculating, go through this article for the steps: Payroll Items On Paycheck Are Not Calculating Or Calculating Incorrectly. 

You may want to view the taxes and contributions of your employees, I've added this article for your guide: Create A Payroll Summary Report. 

Reach out to us if there's anything else that you need about federal or payroll taxes. We're here to further assist you always. 

With the new tax withholding bracket from the irs, those who often make less than $75,000 per year with dependents and marriage will have little to no federal withholding. This means they will likely not have a very large return at tax time in April but this is based on the irs new withholding tables to give lower income families more money in their checks. 

I get what you are saying, but this does not explain what is going on with QuickBooks. I just ran the calculations for 2 of our employees which QB is withholding zero federal using the very same calculation worksheets QuickBooks says that it is utilizing. Emp#1 should be withholding at $52/week or $2,756/year NOT zero

EMP#2 should be withholding at $72/week or $3,744/year NOT zero.
This is a MAJOR issue that needs to be addressed before another year is gone and so many employees have been underwithheld.

Thanks for bringing this matter to our attention, @Foxoffice. I'm here to share details on how QuickBooks calculates federal taxes and guide you on the actions you need to help take care of this matter.

QuickBooks calculates the federal withholding based on each employee's taxable wages, the number of allowances/dependents, pay frequency, and filing status info. When a payroll item on a paycheck isn't calculating or is calculating incorrectly, you'll have to check employees' profiles to make sure their setup is accurate and then determine the cause to correct them.

Before doing so, you'll want to ensure your QuickBooks Desktop (QBDT) is updated to the latest release. This way, we can guarantee the program is running with the newest fixes and patches. Then, get the newest payroll tax table to stay compliant with paycheck calculations.

Whenever you're ready, perform the following to check what's causing your employees to withheld zero federal taxes:

• Verify whether or not a deduction payroll item is set to calculate based on Net or Gross

• Check the order of the payroll items to determine if it is affecting the calculation

• Verify whether the payroll item is set to calculate based on quantity, hours, or neither

• Verify if the annual limit has been set or reached

For the complete details and step-by-step guide, please refer to this article: Payroll items on a paycheck are not calculating or are calculating incorrectly.

Once everything is correct and the issue persists, I'd recommend contacting our Payroll Care team. They can further check the cause of your payroll and federal tax calculation issue and guide you with a fix. 

Also, to learn more about how QuickBooks calculates taxes and the tax amounts reported on an employee's paycheck or the year-to-date (YTD) payroll report, please see this article: How QuickBooks calculates payroll taxes.

Please keep me posted in the comments if you have other payroll concerns and managing employee taxes in QBDT. I'm always ready to help. Take care, and I wish you continued success, @Foxoffice.

I've got to say that I am so frustrated seeing this 'canned' response over and over and over again!!!  It solves nothing and fails to address the real problem. EVERYTHING, EVERY STEP our extensive research has brought up as possible solutions has been checked, crosschecked, updated and reviewed.  There are many QuickBooks's users with this very same issue. QuickBooks needs to take a serious look into it.
We are all paying for the payroll service and should not be reduced to having to manually use the formula (that QuickBooks states it is using) to calculate what the Federal withholding should actually be on each employee.

How did you fix it? I am having the same issue. Thank you

I too, just discovered this problem, and the problem is with employees who have used the new W4 version, 2019 and later...  The new way the IRS calculates taxes is it deducts 8600.00 if single and 12900 if married...  So taxes are figured on the wages once they've reached those thresholds...  The only work around is to use the manual percentage method tables to see what their fed withholding should be. I discovered this with a new employee who just started the middle of June. He was employed somewhere else the first half of the year and has already met that 12900.00 threshold so taxes should be being withheld...  Quickbooks needs to update their tax tables so they use the manual method, we shouldn't have to do this ourselves, considering we are paying for this payroll service.

We pay one employee W2 wages.  Suddenly on May 15th to date, there are no Federal Withholding Taxes withheld. Nothing has changed in his deductions (he uses "0" dependents). Payroll updates every time I do payroll.  What could have changed?

I'm here to help you check why your employee has federal withholding tax, @r2fennell.

Usually, an employee will get a $0.00 federal withholding tax on their paycheck if they claim as exempt, or if they don’t have enough wages to meet the minimum threshold. To check minimum thresholds for federal withholding, here's the IRS Publication 15-T.

Also, here are the other factors that you can check: 

• How much your employee is paid
• How often your employee is paid
• Marital status
• Number of dependents
• Other sources of income

For more information on how to update or verify your employee's tax status, check out this article: Enter federal Form W-4 in QuickBooks Payroll.

If you need further guidance on how to view your past payroll tax payments and forms, see this article: Access payroll tax forms and tax payments.

Let me know in the Reply section below if you need further help checking your employee's federal withholding tax. Keep safe and have a great rest of the day!

So here's the problem, you guys have a canned answer for this.  You didn't read the whole thing I wrote. This employee just started here in June, he has worked somewhere else, where he has already met the threshold for no tax taken out. He has NOT claimed exempt. If I don't take taxes out, he will end up at the end of the year with doubled-up threshold, and not have paid in enough, and he will be VERY ANGRY with me!!!  Quickbooks is not figuring the taxes correctly and I don't see anywhere in the publication that says you don't take taxes out starting from day one, because if they meet the threshold you are talking about, they are suddenly going to have taxes taken out and their paycheck is going to suddenly be smaller than they have gotten used to. It's not really up to Quickbooks to decide what they should have taken out, because at the end of the year, when they do their tax returns, that is when the deduction occurs for the initial non-taxable amount. You, Quickbooks, do not know what this person has as far as investment income, interest income, etc, that will also be applied towards their non-taxable amount.

I agree - its truly a recycled response over and over again. We continue to have an issue with ALL of our employees who use the new W-4 regardless of their actual income. We've had no issues with any of the employees who used the old W-4.

We have one employee who makes $70,000 a year (and yes they are set up correctly), yet has had $0 federal withdrawn since they started last year. You're telling me 8 months into this year they haven't qualified for taxes to be withdrawn?? Their state taxes are being withdrawn correctly. Why not federal? I'm so sick of QuickBooks not addressing/correcting the actual problem.

Also, to further add, the words Minimum Threshold do not appear in the publication that you have linked in the answer. So how do you check the minimum threshold. I get it that we don't pay taxes on the first X.XX dollars, depending on your filing status, but that has always been the case, we have always had exemptions for ourselves, our spouse and then for each child. That amount has never been deducted until you file your tax returns. The exemptions have been taken away, except for children, so I don't understand why I am having to figure by hand, the withholding for this employee. That is why I pay for payroll service.

And just imagine how p*ssed off that employee is going to be at the end of the year, when they have to pay a huge check in to the IRS for the taxes that should have been withheld throughout the year. They are going to blame you. I wish now that I had given this employee the old pre-2019 W4, and  I will do this from now on for any new employees. Once you enter the employee with the new W4, you can't change it !!! 

Hi

I have accidentally deducted $500 from my employee's last paycheck, she wanted to deduct extra $5. Then she asked me for money and I advanced her $500 . Now I need to deduct the $500 from paying iRS because otherwise she will get that $500 going back to her. How do I correct this mistake?

I'll hop in this thread to assist you further, @Mahvash.

Can you elaborate on this further to get the appropriate resolution for your concern? What are you referring to about deducting the $500 from paying the IRS? Don't you only want to amount to get taxed?

I'll wait for your reply to ensure this matter will be resolved. Have a good one!

I am having the same problem with one of my employees. There is 0 being taken out for federal but all the other taxes are being deducted okay. 

I've found something that helps, but doesn't fix. That stupid box in Step 2 on the new W4 need to be checked for anyone who is filing jointly and has a working spouse. Its worded very ambiguously and implies that you are working two jobs. However, what it actually does is account for you having a spouse that get s a paycheck. If you do NOT check that box, it deducts the standard deduction of 12,900 form the gross annual and calculates federal tax on the difference. Come tax time, it would be a nightmare for the couple if both had this happen as they would have taken the standard deduction for a married couple twice.

I just discovered this today and have adjusted the QB info accordingly. I have yet to run a payroll on it. I'll update if it actually makes a difference.

My employees are not being deducted enough Federal taxes. It is only 12% for everyone. How do I change the percent charged for all employees. According to my accountant it is illegal to only be charging 12% Fed tax and all my employees are receiving tax bills because of it.

I appreciate you joining in on this thread, The Local. I've come to help you change federal tax percentage charges for your employees.

With the latest tax inflation adjustments from the IRS, the marginal rates for this tax year will depend on your employee's filing status info. You'll want to consider reviewing their status and changing the option to Single or Married filing separately to enable changes in your employee's federal tax withholdings. 

To do that:

1. Go to the Employees menu and select Employee Center.
2. Choose the specific employee and click the Pencil icon on the Employee Information.
3. Select the Payroll Info section and click Taxes.
4. On the Filing Status dropdown, choose Single or Married filing separately.
5. Add all necessary changes and select the options under the Subject to section.
6. Once done, click OK. 

Moreover, I've added this reference to guide you on how to view your past payroll tax payments and forms: Access payroll tax forms and tax payments.

You're always welcome to get back to this forum if you have additional questions about your employee's federal withholdings. We'll be around, willing to assist you at any time. Have a good one!