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kend2
Level 2

setting up school district tax payroll item

When setting up an employee payroll taxes, the following question is asked:

"Is (the employee) subject to any of the following taxes?

      OH-School District"    yes-no-help

When yes is selected, it fills in an invalid school district tax, and does not provide a way of changing it to the correct school district tax.   I have several school district taxes setup as "other" "local" taxes.

There does not appear to be a way of defining the tax as an OHIO tax, only a local tax.  Should it be a "local income tax" or a "secondary local income tax"?   How can I setup the tax item so that it can be selected as a response to the previous question:

"Is (the employee) subject to any of the following taxes?

      OH-School District" 

 

Solved
Best answer January 14, 2019

Best Answers
IamjuViel
QuickBooks Team

setting up school district tax payroll item

Hello there, @kend2.

 

I'm here to share some information about setting up your Ohio Local Income Tax in QuickBooks Desktop.

 

For starters, local income tax is an additional impose by several states including Ohio. These are applied to people who live or work in the locality. While School District Tax is a specific local tax imposed by schools to help fund school operating expenses.

 

On the other hand, in setting up your OH-School District taxes you'll only select User-defined if you can't see the predefined tax form on the list. To search for a specific local income tax form, here's how:

  1. Go to Employees.
  2. Look for the employee you want to set up.
  3. Double click on the employees name to open Edit Employee window.
  4. Go to Payroll Info.
  5. Click Taxes button.
  6. Choose the Other tab.
  7. Click on the drop-down arrow under Item Name window
  8. Select Add new.
  9. In the Add New Payroll, click the drop-down arrow and look for OH-School District.
  10. Follow the rest of the on-screen instruction to complete the process.

I'd also recommend reaching out to your accountant or contact your Local Tax agency so you'll be guided accurately with other specific tax-related inquiries.

 

Stay in touch with me and let me know how it works on your end. I 'm always here to help you in making sure your state tax is set up properly on your end.

View solution in original post

11 Comments 11
JessT
QuickBooks Team

setting up school district tax payroll item

Hi kend2,

 

I'm happy to share some information about the local tax.

 

We're unable to change the Other type. It's already taken as an Ohio tax based on the work location of the employee. If you need to set it as a local income tax or a secondary local income tax, I'd suggest creating your own local tax item instead. It's best if you can verify the tax tracking type with your tax agency.

  1. On the Taxes window, click the down arrow in the Item Name field of the first line.
  2. Choose <Add New>.
  3. Select whether the employee or the company will pay the tax and click Next.
  4. Enter the tax name. Ex. OH - School District Tax and click Next.
  5. Enter the details of the tax agency and click Next.
  6. In the Tax tracking type drop list, choose whether it's a Local Income Tax or a Secondary Local Tax.
  7. Click Next and select from the options on how the tax is calculated.
  8. Click Next and and enter a Default rate and limit.
  9. Click Next, and click Finish.

If you have questions, you can always go back to this thread.

kend2
Level 2

setting up school district tax payroll item

Thank you for your response.  In previous years, I have entered the taxes as a "user defined" local income tax as you have suggested.  When I completed the Ohio IT-3 form this year, I had to fill in the OHIO school district taxes paid manually.  I assume if they were classified as OH-School District taxes, the form would have been filled in automatically. 

 

It is curious that it selected "Clyde" as the default school district.  The address of the business and the work place has been in Fremont for several years.  (It was previously located in Clyde.)

 

On a related note, could you explain the difference between "Local Income Tax" and "secondary Local Tax" ?  Thank you again for your help.

IamjuViel
QuickBooks Team

setting up school district tax payroll item

Hello there, @kend2.

 

I'm here to share some information about setting up your Ohio Local Income Tax in QuickBooks Desktop.

 

For starters, local income tax is an additional impose by several states including Ohio. These are applied to people who live or work in the locality. While School District Tax is a specific local tax imposed by schools to help fund school operating expenses.

 

On the other hand, in setting up your OH-School District taxes you'll only select User-defined if you can't see the predefined tax form on the list. To search for a specific local income tax form, here's how:

  1. Go to Employees.
  2. Look for the employee you want to set up.
  3. Double click on the employees name to open Edit Employee window.
  4. Go to Payroll Info.
  5. Click Taxes button.
  6. Choose the Other tab.
  7. Click on the drop-down arrow under Item Name window
  8. Select Add new.
  9. In the Add New Payroll, click the drop-down arrow and look for OH-School District.
  10. Follow the rest of the on-screen instruction to complete the process.

I'd also recommend reaching out to your accountant or contact your Local Tax agency so you'll be guided accurately with other specific tax-related inquiries.

 

Stay in touch with me and let me know how it works on your end. I 'm always here to help you in making sure your state tax is set up properly on your end.

Amy7402
Level 2

setting up school district tax payroll item

So I have employees living in 2 separate school districts with different percentages of withholding.  QB desktop only allows one school district payroll item to be set up and I have to delineate a single percentage.  Do a set up the second as a local tax?  Will it report correctly on a W-2 since its a local and not a state?  when I try to delete the school district tax from the employee and adding it as a local, QB advises me not to do it.  Where to I go from here?

Michael K
Moderator

setting up school district tax payroll item

Hey there, @Amy7402. Thanks for joining the thread.

 

I'm here to help out with your question. You are correct in that QuickBooks Desktop only allows one school district. We pull this information from government tax tables. In order to best assist, I'd like to get some additional information. Assuming the employee's must have two school districts deducted, I'd like to know how the employee's have been set up. Are you trying to withhold for both the employer district and the employee home location district? If that's the case, I'd double-check with your local agencies to make sure you need to withhold both. We strive to keep the tax tables up-to-date, and we'd like to hear the outcome.

 

Just reply back with the additional information and we'll get you back up and running in no time! For more information on local taxes in QuickBooks Desktop, check out create or set up local taxes.

 

Please let me know if there's anything else I can do to be of assistance. Wishing you and your business continued success in all that you do.

czieman
Level 2

setting up school district tax payroll item

I think what is going on is similar to my issue. She has one employee in one school district and another employee in a different school district. For some reason, Quickbooks Desktop has the school district tax under a STATE tax in Ohio. Ohio has multiple school districts all with different rates. I believe everyone is doing a work around by creating each school district as a local tax, which I believe is the best solution. However for me, most of my employees do not reside in a school district that is taxed. It is extremely annoying that the desktop version keeps adding the school district tax because it is set up as a STATE tax. How do we fix this so that the school district tax is regarded as a local tax? Which it should be in Ohio?

Thanks

Kristine Mae
Moderator

setting up school district tax payroll item

When you set up your employee under Ohio, our program will automatically add the OH-School District item, Czieman. Let me help you get around it.

 

You can delete the OH-School District item, then create a User-Defined Tax. You use this tax type if any other local or city taxes are not automatically entered.

 

First, let's delete the school district item. Here's how:

  1. Click Employees, then go to Employee Center.
  2. Select the employee.
  3. Go to the Payroll Info tab, then click Taxes.
  4. Go to the Other tab.
  5. Select OH - School District, then click Delete

On the same tab, let's create a User-Defined Tax. Here's how:

  1. Click any line under Item Name, click the drop-down arrow, then select Add New.
  2. Select User-Defined tax, click Tax is paid by the employee, then click Next
  3. Enter a desired name, then click Next
  4. Select the liability account, then click Next
  5. Select the tax tracking type, then click Next.
  6. Select either Calculate this item based on quantityCalculate this item based on hours, or Neither, then click Next.
  7. Enter a rate and limit, then click Next
  8. Click Next, then Finish

Let me share this reference on how to set up payroll items for new state taxes.

 

If you need more help with your payroll setup, you can tap me. 

czieman
Level 2

setting up school district tax payroll item

I have deleted that OH-school district tax at least 4 times and it just keeps coming back!!

MaryGraceS
Moderator

setting up school district tax payroll item

Hello there, @czieman.

 

Let me share some steps to delete the OH-school district tax item in the employee's profile. 

 

QuickBooks automatically adds any missing "Other Tax" payroll items for your state when you add a new employee, review the tax setup in the Employee Defaults window, or change in the employee record.

 

To delete the payroll item, you need to confirm the change by selecting the Yes or No button in the pop-up window. In your case, you need to select No to remove the item. 

 

If you get the same result, let's run some troubleshooting steps to fix possible data issues. To start, update the QuickBooks to the latest release. Sometimes downloading and installing the latest updates fix minor issues within the program or file. 

 

After that, run the Verify and Rebuild tools. This process can locate the issue and to correct the errors. You can follow the steps in this article: Resolve Data Damage on your Company File.

 

For more information, I've attached some articles you can use as your guide for 2019 year-end: 

Please know that I'm only a post away if you have any other questions. Have a great day ahead. 

ChristiJo
Level 1

setting up school district tax payroll item

Did you find a solution to this? THis is our first year using and I need to add it manually as well. Odd that its calculated in the tax end- but it doesnt transfer over to the IT3

ZackE
QuickBooks Team

setting up school district tax payroll item

Thanks for joining the Community, ChristiJo.
 

kend2 selected IamjuViel's post as the solution to their original inquiry about setting up school district payroll items.
 

As mentioned in the solved answer, you can work with an accounting professional or contact your local tax agency to be guided accurately with tax-related inquiries. If you're in need of an accountant, there's an awesome tool on our website called Find an Accountant. All ProAdvisors listed there are QuickBooks-certified and able to provide helpful insights for driving your business's success.
 

Here's how it works:

  1. Go to our Find an Accountant page.
  2. In the Find an expert in section, choose what you're looking for, then use your search field to enter a City or ZIP code.
  3. Select Search.
  4. Browse through the results and find one that works best for your business. You can click on each ProAdvisor's profile to learn more information about them.


Once you've found an accountant, they can be contacted through their Send a message form:

  1. Use the available text box to introduce yourself. Be sure to include details about which services you're looking for.
  2. Enter your appropriate info in the Your nameYour email, and Your phone number (optional) fields.
  3. Hit Send message.


You'll also be able to find many detailed resources about using QuickBooks in our help article archives.
 

Please feel welcome to send a reply if there's any additional questions. Have a lovely day!

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