This has been a continuing problem for years with QB.  The work around by doing the separate W2 should have been unnecessary to begin with - you should be able to to multiple states on a single employee.  Ridiculous that QB can't do this (can't integrate properly with Office 365 either). My feeling is that the actual reason is that they don't want to - Intuit wants to be the preparer of payroll, not let us do it.  For years I purchased accountant enhanced payroll subscriptions for use with clients (50 payrolls each subscription). I can still renew these, but can no longer purchase this way, if I need more payroll I need to do the subscription and fee per employee etc.  Not very friendly to accountants.

Hope you are able to work this out. Wish I had a solutions

Continuing problem for years - it is not that Intuit can't find a solution, they don't want to - they want to force us to use their payroll prep.  I can no longer add on to the two Accountant's Enhanced payroll services I have where I can pay an annual fee to do up to 50 payrolls for each subscription.  I can continue to renew the ones I have (for now at least) but if I need more access to payroll, I need to do the subscription and monthly fees.  This is not very accountant/payroll practice friendly.  Again, Intuit wants to do the payrolls not have accountants/bookkeepers do it.

Hi Lesli.  I finally found a work around for this. You first process a paycheck for hours worked in one state. Then go into the employee set up and change the state tax setup, and process an unscheduled check for the same date for the hours in worked in the second state. It's not the most intuitive, but it will separate the wages to each state correctly on one W2. Hope this helps and good luck!

Yes and I am not going to pay someone else to do payroll for me, I have different pay rates for different jobs (prevailing wage, reg rate) plus I have to manually figure the KC Earnings tax on each check because they only pay the tax on wages actually earned within Kansas City, and the program has no way to designate which jobs are KC and which are not, so it tries to tax the whole thing. I have, for 27 years, had two employee records set up for each employee, so I can keep KS and MO wages separated, if I do them all under one employee record, it's going to lump all wages together. I have always had a popup message telling me there was another employee with same SSN, but I could click to save anyway, now that option is gone. So as soon as I have to make ONE SINGLE CHANGE to any employee record, I'm going to have to alter the SSN and give them a fake number just to save the change. Then I can NEVER change the fake number back to the real number, without change the first employee record to a fake number. I can see so many problems and mistakes getting made.

I looked into that, but the only issue I can see is that the W4 is different for each state. Plus the employees have extra withholding taken out on the Kansas check to account for the tax table thinking that they worked a short week, so didn't take enough tax out. This would require me to have to look up what they have on W4 for both states so I can change it back to Missouri when I'm done...  This change has just happened to me, but it sounds like other people have had it for a while???

Unfortunately, you'll have to keep their state W4's handy and change it each time. Like I said, it's not the most intuitive and adds a little extra work, but I'm used to it now and it's been working out okay. To me anyway, it certainly beats having to change software companies. I like QB desktop payroll and have also been using it for years (also I have a couple of clients that use Gusto and I'm not a fan).

So I'd have to change the State Worked to KS and that State subject to withholding also to KS?  Like I said, they do different allowances and extra withholding for KS because when they only work 8-12 hours a week, it wasn't withholding any tax at all. I have one guy who claims 4 allowances for MO but zero for KS to try to account for this.  So how does that work at the end of the year and you try to do W2's?  Does it then put both states on one?  I looked into this more and found that starting this year (but is on hold for time being) IRS was trying to lower the threshold for electronic filing, which right now is 250.  So anybody like us who maybe has 20 employees would then actually have 40 W2's to file. Maybe that's the reasoning...

I'm honestly at a point now, especially already having 7 months done one way, going to have to keep using two employee files for the rest of the year. The only workaround I can see is to change the SSN on the KS employee in order to allow the MO employee file to have any changes made. Then at the end of the year when I do W2's, I will have to file the MO W2/W3 and transmit it, then change the MO employee SSN to a fake # in order to change the KS employee back to the correct SSN, file the W2/W3 and transmit. That's the only time of the year that SSN's are used on tax forms. I have to do my own unemployment form because I have to report both states all to Missouri, and nothing to KS, so the SUI box is unchecked on my KS employee files. My accountant said it's perfectly fine to submit multiple W3's, they only care about the SSN and the wages from both W2 gets added together on their end....  UGGGHHHHHH this is maddening....

Yes, that's correct, you would change the state worked and withholding state, and change the withholding exemptions each time. Actually, I had not thought about creating a new employee for each state when I ran into this issue, which is a good idea. I've been doing it this way for a couple of years, and it does create one W2 with both state wages separated at the bottom with the amounts withheld for each state. I've also added class tracking (labelled by state), so I change the class on each paycheck. This way you can run a payroll summary filtered by class, and it separates the wages to report in each state for each employee.

Next question. Since it is trying to force using only one employee, you therefore can only use one timesheet. This means I have to enter all the time onto one timesheet, but when I do the first paycheck, it's going to pull all that time in, even the KS stuff...  How do I get rid of it?  Our job#'s  already includes a K or an M at the end, so it's easy enough to see what jobs are KS, so do I just delete them off the paycheck at that time? Then do the same for the KS check but delete the MO jobs? Sorry for the questions, but I'm going to have to figure this out before my next payroll. Unfortunately with already having 7 months already processed, I'm going to have two W2's already, so for the rest of the year, I may have to alter the SSN until I can start fresh in January. It makes no sense to have two W2 for 7 months, then 5 more months with one W2 with both states on one. It's insane that no matter what you do, you have to still create two paychecks, so what difference did it make to QB to stop allowing two employee files with the same SSN???

I just wanted to post an update, since this is the first payroll I was trying to do with having two states on one employee.  I found that not only would I have to change the state worked and the state withholding to the other state and change all the allowances and extra withholding, but when I do the check I had to make sure I changed the class to Kansas and check the box to Do Not Accrue sick/vac or it would double it up, and also had to wipe out all Other Payroll Items or their medical deductions would double up. Then, when I was done, I would have to go back into this employee file and change all the State withholding info BACK TO THE ORIGINAL...   This is asinine and I could see mistakes being made and was going to create tons of extra work changing things back and forth....  It was not just as simple as changing the employee back and forth between Missouri and Kansas.  I am paying for Assisted Payroll and MOST OF THE WORK should be being done for me, NOT just the tax tables, but this was going to create SO much extra work...

SOOOO I tried something and it worked. I opened up the secondary (Kansas) employee file, clicked the box on the lower left that says Employee Is Inactive, then I changed all the fake social security numbers back to the real number, then when I clicked SAVE, it now is back to giving me the warning that I already have an employee with this number, am I sure I want to save and I click YES and it saves. Then I went to the top of the Employees list, click on the drop down box and clicked All Employees, found the employee I just inactivated, clicked on the X to the left of their name and it reactivated it. 

As I said, this only becomes an issue when you need to change an employee's rate of pay or their medical deductions, or anything else they need changed...  I checked with Missouri and they said there is NO STATE COMPLIANCE that requires both Kansas and Missouri to be listed on one W2, because when you create a State W2 file to upload, it asks you at the time WHICH STATE you want to do!!!  You CAN ONLY CHOOSE ONE STATE!!!  And Kansas Doesn't allow uploading files, so I have to just choose Missouri...  Someone at QB didn't think this thru before they made this change...  As I said, I've used Quickbooks since 1996 and THEY are the ones who told me I had to create two separate employee files, one for each state, and I've done it this way for 27 years!!!

Have you found out anything else about this? I also was using 2 entries for each employee working in each state, and am now having the exact same problem and it is ridiculous!!

We are in IL, but are right next to St. Louis and just discovered this issue also. It has taken us 2 weeks of trying different things with them to even completely identify the problem. You are 100% correct that it messes up taxes when done under one profile. They did not think about all of the implications. This also touches work comp reporting too. I am filing a complaint with them and going to rally any other small business owners I know in similar situations to do the same. I also plan on other actions within my network to try and get their attention. We as small business owners cannot allow ourselves to be bullied by a big company like this, when they could change a few lines of code and fix this issue. 

I am also struggling with this. I have employees that work in both Washington and Oregon....Intuit....any solutions yet?

I hear your sentiments regarding the challenge of setting up withholding for employees who work in both Washington and Oregon through Intuit QuickBooks, Julsnic. 

At this time, QuickBooks still doesn't have a direct feature for handling withholding for employees in multiple states on a single paycheck. You'll want to check this article for additional information: Set up employees and payroll taxes in a new state.

For now, I recommend you provide detailed feedback on this by going to the Help menu in your company file> Send Feedback Online> Product Suggestion.

In the meantime, you can manually file taxes outside QuickBooks. Given the complexity of withholding for employees in multiple states, I recommend you manually calculate and file taxes for your affected employees outside QuickBooks.

Please don't hesitate to get in touch whenever you need assistance. I'll here ready to provide support whenever you need it. I'm here to assist you in any way possible. 

Does anyone know of another payroll program that will integrate with Q/B.  This issue is years old and now i cant have an employee with the same SS number set up in two state.  YIKES

Does anyone know of another payroll program that will integrate with Q/B.  This issue is years old and now i cant have an employee with the same SS number set up in two state.  YIKES

John, I figured out a workaround on this. I set up one employee record for one state, then I make that employee inactive. Then set up the second employee for the second state...  You can then reactivate the first employee by going up to the top of the employee list, where there is a drop-down box, that says Active Employees.  Change it to All Employees and you will see the black X next to the first employee. Just click on that X and it activates both of them. This didn't used to be an issue but an update six months ago, changed it. There is absolutely no reason you can't have two separate employees, because the way QB tells us to do it (by cutting two paychecks, and changing the employee record back and forth between the two states) does not work and you are still cutting two separate paychecks! I have been using QB since 1996 and have always done payroll this way, now they are trying to tell us "they're trying to get in compliance" and yet can't tell you what the compliance is.