MO W4 tax entry for employee

Hello,

QuickBooks Desktop doesn't have a specific field to directly enter Reduced Withholding from Line 3 of the MO W-4. This is a known limitation in the software since state-specific adjustments often require workarounds.

While marking the employee as exempt may seem like a quick fix, it may not be the best approach unless the employee has explicitly stated exemption on their W-4. Reduced Withholding doesn't mean full exemption, it simply adjusts the amount withheld.

Here is one workaround:
1. You can manually adjust the withholding amount for Missouri taxes during payroll setup for that employee.
2. Go to Employees -> Employee Center -> Edit Employee -> Payroll Info -> Taxes -> State (MO)
3. In the Override section, enter a reduced flat withholding amount that aligns with the employee’s request on Line 3 of the W-4.

If you want to avoid overriding the settings, consider calculating the reduced amount externally and using a deduction or payroll item adjustment. However, this may involve manual tracking for accuracy.

This should help

Hello and welcome to the QuickBooks Community, TILCjoplin! I’m thrilled to see you making your first post. Maintaining compliance with state regulations, particularly in accurately setting up employees' MO W-4, is vital for a smooth payroll process. I'm here to ensure you choose the right data, so their taxes are tracked correctly.

We recognize the relevance of having a specific field to enter Reduced Withholding from Line 3 of the MO W-4. I agree with @GilbertFox33's inputs. You can manually adjust the withholding amount for state taxes in the employee setup or calculate the reduced amount using a deduction or payroll item adjustment. Since this feature is currently unavailable, these options would be an alternative.

If you opt to adjust the withholding amount in the employee setup, follow these steps:

1. Go to Employees, then select Employee Center.
2. If you’re adding a new employee, pick New Employee and double-click their name from the list if they're existing.
3. Choose the Payroll Info tab and hit the Taxes button.  
4. Hit the State tab.
5. In the State Subject to Withholding section, pick the appropriate Filing Status and indicate the reduced amount as negative in the Extra Withholding field.
6. Click OK twice.  

If you decide to calculate the reduced amount using a deduction or payroll item, you can manually override the details during your payroll process. Please keep in mind that this approach may require careful manual tracking to ensure accuracy.

Additionally, whenever you're ready to file your state payroll tax forms and make electronic payments, I recommend checking out this helpful article: E-file and e-pay state forms and taxes in QuickBooks Desktop Payroll. It provides a detailed, step-by-step guide that will simplify the process for you.

I am committed to providing customized solutions that align with your payroll needs, especially as you set up employee state withholding details in QuickBooks. Your concerns are significant to us TILCjoplin, so please feel free to reach out anytime you need support. Have a wonderful day ahead!