Hi there,
I appreciate you taking the necessary steps to set up and pay an employee using multi-state in QuickBooks Online Payroll. I am here to help you resolve this issue.
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 employee's 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, if the default state is California (CA) and you want to process a pay run for Los Angeles (LA), here's how to change the state:
- Go to Payroll, then select Employees.
- Select your employee.
- From Employment details, select Start or Edit.
- From the Work location dropdown, you'll see a default work location (usually your company's address). Select an existing address or +Add work location.
- If you selected add work location, enter the physical address where your employee works and select the correct address from the list. Don't use a P.O. Box. The physical address helps us determine the correct taxes.
- When finished, select Save.
I suggest that consulting with an accountant or a tax professional is highly recommended to help set up the employees correctly so QuickBooks will calculate and deduct taxes accordingly.
You can read this article to know more about multi-state employment payroll situations in QBO: About multistate employment payroll situations.
Moreover, I'm adding this article about reciprocity agreements between states to know where employees pay taxes: Multistate withholding matrix.
If you have any other questions about multi-state payroll, let me know by adding a comment below. I'm more than happy to help. Keep safe!
