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L
Lindyw1
January 30, 2021
Question

Multi state payroll

  • January 30, 2021
  • 3 replies
  • 2 views

We are a small construction company located in Texas-we have rc'd our Louisiana license and will be occasionally sending crews to do work in LA which has state income tax(Texas does not).  How do I need to set up my payroll to separate the hours worked in LA verses Texas to correctly pay the taxes?   We use Desktop Pro Plus 2021.

 

Thanks in advance!

    3 replies

    Jen_D
    Jen_D
    Level 8
    January 30, 2021

    Thanks for your inquiry about this Multi-state scenario, @Lindyw1,

     

    I can provide some insights on how to handle this in QuickBooks Desktop.

     

    While the option to assign multiple states under an employee profile is still unavailable, the transition must be done manually. This means that you need to switch the states manually the moment you create payroll for the employees working hours.

     

    Don't worry, I'll be providing a step by step process so it's easier for you to track everything. For example, the default state is TX and you want to process a pay run for LA, here's how to change the state:

     

    1. Go to the Employees menu, then select Employee center.
    2. Double-click the name of the employee.
    3. Choose the Payroll Info tab and then Taxes.
    4. Choose the State tab and select the state you will be processing payroll.
    5. Do this for State Worked and State Subject to Withholding fields.
    6. When you're done, select OK.

     

    When you will process payroll, the system will use the state assigned to calculate taxes. Here are some examples:

     

    Payroll processed for Texas:

     

     

    Payroll processed for Louisiana:

     

     

    With this process, taxes will not be mixed up and are reported accordingly. Here is a sample report to show you how QuickBooks will treat Multi-state payroll:

     

     

    For your guide with editing employees profile and running Excel payroll reports, see the following links:

     

     

    It's been nice assisting you today. If you need any help, please let me know so I can share some more insights to resolve your concern. Have a lovely day!

    R
    RK46
    November 5, 2021

    I am confused. Other QB postings say QB does not support “roaming” workers who work in multiple states, but your explanation seems to contradict that - it appears relatively simple. Am I missing something, or are the other posts incorrect?

    G
    Giovann_GModerator
    Moderator
    February 23, 2022

    How does Quickbooks take care of garnishments if you set up an employee for state 1 and then again in state 2?


    Thanks for joining in the thread, 2stateissue.

     

    I'll share some information in handling garnishment for employees that work in various states.

     

    The software doesn't support multi-state payroll. With this, you can process payroll for a specific state manually. You can create two different garnishments payroll items and be sure to select the right one for the targeted state.

     

    Here's how: 

    1. Go to the Lists menu, click Payroll Item List.
    2. Select the Payroll Item button, then New.
    3. Follow the steps in this article to set up garnishment deduction through EZ setup: Set up a payroll garnishment item.
    4. Repeat the same process for the other state.

     

    You may also review this material to learn more about processing paychecks in QuickBooks Desktop: Create and run your payroll.

     

    Please don't hesitate to reply if you need further assistance setting up a garnishment deduction. I'll be here to help you.

    A
    ABELLETETE
    August 10, 2021

    Will the use of the proposed method under withhold federal income taxes?  If the federal taxes withheld are based upon the pay period length and the gross wages, the calculations will assume the annual income is less and under withhold.  If the employee is paid by direct deposit, will this also result in two payments each pay period?

    RenjolynC
    RenjolynC
    Level 9
    August 10, 2021

    Thanks for chiming in on this thread, ABELLETETE.

     

    I have some details about the Federal Tax Withholding.

     

    The Federal Income Tax (FIT) amount are calculated based on the following:

     

    • Agency's wage and tax calculation table.
    • Employee's filing status, number of allowances, or extra withholding amount in the employee setup.
    • Pre-tax deduction items included on the paycheck.
    • Changes in pay frequency (creating extra paycheck outside of normal pay schedule).
    • Creating a paycheck with wages that has lesser or larger amount than what the employee normally gets in a pay period.

    In some cases, if the previous amount deducted on the paycheck is underpaid or overpaid, QuickBooks automatically catch up on the next paycheck. This is why you see two payments are created for each pay period. 

     

    To learn more about the process, you can read this article: How QuickBooks calculates payroll taxes.

     

    If you have an incorrect payroll liabilities, check out this link to use a liability adjustment to fix them: Adjust payroll liabilities in QuickBooks Desktop.

     

    Please don't hesitate to reach out to us here if there's anything else you need. We're always around to help you out. Have a good day ahead. 

    S
    Stogsdilltile
    March 11, 2024

    There is an issue with the unemployment tax according to the rules unemployment is paid to the state that you live not in the state that you work, because the state that you live in is where you collect your unemployment not the state you work.  I can not seem to change that in QB

    M
    Mark_AG
    Level 1
    March 11, 2024

    Hello there.

     

    Thank you for reaching out with your concern regarding the unemployment tax setup in QuickBooks Desktop Payroll. I can see that you're experiencing an issue with ensuring the unemployment tax is paid to the correct state, based on residence rather than work location. I understand how important it is to get this right, so let's address your concern.

     

    First, ensure each employee's tax setup is correctly aligned with their home state. Here's how:

     

    1. Go to the Employee Center.
    2. Select the employee's name.
    3. Navigate to the Payroll Info tab and click on the Taxes button.
    4. Select the State Tax tab. Here you can ensure the employee's State of Residence is correct.

     

    QuickBooks Desktop allows you to specify which state should receive the unemployment taxes during the setup of each employee. You can modify it by going to the Edit Employee section and adjusting their State Worked and State Subject to Withholding settings under the Payroll and Compensation Info, Taxes, then State Tab.

     

    For more information about managing and changing SUI rate in QBDT, check out this article: Update your State Unemployment Insurance (SUI) rate.

     

    You can browse our compliance page to ensure that you entered the correct tax rate in QBDT: Access state agency websites for payroll. It also provides details about your tax forms, unemployment tax, E-file and Pay, and Employer registration.

     

    Let me know if you need additional concerns about adjusting Unemployment tax in QuickBooks Desktop. I'm always here to assist you.

    S
    Stogsdilltile
    March 11, 2024

    I followed your instructions and when you put the state you work it changes the state for the unemployment and this is not correct for our situation.

     

    Thank you

    Mary Jankee

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