W4 for out of country employee

I'll show you how to manage a temporary employee and handle their W4 properly, LisaOnas.

First, we'll have to setup your employee as tax exempt in QuickBooks since they live out of the country. To guide you further, follow the steps below.

1. Go to the Payroll menu.
2.  Within the Employees tab, select Add an employee.
3. Below the email address field, uncheck Ask this employee to enter their personal, tax, and banking info with QuickBooks Workforce. You’ll need to add their info.
4. Fill in the info for each section and from Tax withholding, select Edit.
5. Fill in the Federal Withholding info. Select Exempt from the Filing Status.
6. Fill in the State Withholding info. Select Exempt from the Filing Status.
7. From Tax Exemptions, select the taxes your employee is exempt from.
8. Click Save.

If you require assistance identifying the payroll taxes that your employee is exempt from, you can reach out to them:

• IRS Publication 515
• For state tax exemptions, speak with your state's agencies.
• Make contact with a tax expert.

They can also help and provide more information about preparing the W-4 form. For your additional reference, you can check this article: Enter federal Form W-4 in QuickBooks Payroll.

You'll want to run, print, and customize payroll reports in QuickBooks Online Payroll:  Run payroll reports in QuickBooks Online Payroll.

Stay in touch if you need help with other QuickBooks concerns, especially managing employees and payroll forms. I'm here to help you anytime. Take care and stay safe.

Thank you for the tax information, however that doesn't address my issue of not being able to enter this employee's address.  QuickBooks requires a state code to complete the W4.  As this employee lives out of the country, there is no state code. (She lives in Costa Rica)

Hi there, @LisaOnas.

QBO is only dependent on state and IRS regulations. Usually, payroll taxes such as state and local withholdings are based on the employee's residence and work location. These taxes are calculated and reported differently depending on the laws of the particular states where your employee lives and works.

For the time being, I would recommend contacting your state agency so they can discuss this further for you. 

Some states have reciprocity agreements. To find out whether there is a reciprocity agreement between your employee's work location state and residence state, you can check out this article: About multistate employment payroll situations.

In case you need help with updating a work location in QBO, you can open this link: Changing a primary state.

If you have any other payroll questions, please let me know by adding a comment below. I'm more than happy to help. Have a good one!