Withholding Taxes for an Employee that works in Michigan and Wisconsin

Hey there, @ooduyebo. 

Thanks for reaching out to the Community for support. 

To review your account securely and check what has caused the withholding taxes to only be paid to Michigan instead of both states, you'll need to contact our payroll support team. Our payroll team can take a look at your account and check on the back end of things to investigate the cause of the withholding issue. I've included some steps to contact support below. 

1. Sign in to your QuickBooks Online company.
2. Select Help (?).
3. Hit Talk to a human. 
4. Pick a way to connect with support (Chat, Callback, Etc.). 

Please let me know if you have additional questions or concerns. Feel free to reach out to the Community at any time. Take care! 

@Tori B Thank you very much for your prompt response. 

I have contacted the payroll team on multiple occasions and I was informed that it is a limitation in the system that is causing this to happen (the limitation is caused by reciprocity agreements). As a result, all the payroll is sent to Michigan. 

If you have any further insight to assist me, this will be greatly appreciated. Thank you very much. I appreciate you. 

@Tori B No, this has not been resolved. Please let me know if you have any further insights and ways to get this resolved. I appreciate all your help. 

Thank you 

Thank you for keeping us posted, ooduyebo.

Michigan requires separate reporting of wages at multiple work locations within the state. We currently don't support the reciprocity agreement with Michigan. You can use our forms and reports as your guide in filling out your tax forms. I'd also suggest reaching out to an accountant to help you with filling out and handling your state tax withholdings. 

Feel free to use this link for more details: 

• About multistate employment payroll situations
• Run payroll reports

Let me know if you have other questions. The Community Team is always ready to help. Take care!

@Catherine_B Thank you for this. How will this work on Quickbooks payroll? I was informed that this is a limitation (meaning they will only report the wages to Michigan). 

When i pick the work location of Wisconsin while trying to pay the employee, it sends all the taxes to Michigan. Why does this happen? 

Like you mentioned, we wantto make sure that Wisconsin wages are taxed in Wisconsin. But it appears in quickbooks we cannot do this. This is where we need your help. Thanks

Thank you for chiming back in on the thread, ooduyebo. I will be delighted to shed some light on this situation here! You are correct in saying that there is a limitation when it comes to this and that we will only report to one of the States. Your employee is what we would consider a roaming employee—one who changes their work location or local tax jurisdictions repeatedly. Our system is designed to support employees who report to and work from a single work location.

However, if the employee spends at least 80% of their time in one state, they would be set up in the state they spend 80% of their time. If not, you may have to find an alternate payroll service provider or consult with a tax professional or state/local tax agencies regarding this situation. You can refer to this article for more information pertaining to multi-state withholding matrix. Please let me know if you have follow-up questions. My team and I will be happy to lend a helping hand. Take care and be safe.

Thanks @SashaMC 

I am  very grateful for all the responses received, thank you all. However, I am bit confused by the resolution of this (because i believe we have received different answers). So how do we ensure that we pay Wisconsin the withholding tax? They are asking us to file a WT-6. 

What is the solution? What have your other clients done? Thank you so much. 

Hi there, ooduyebo.

As my colleague shared above, we currently don't support the reciprocity agreement with Michigan. You can reach out either an accountant or to your states so you'll be guided in handling the taxes. You can use our forms as guide in filling out the forms.

You can check this reference as your guide: 

• About multistate employment payroll situations
• Run payroll reports

I'll be around if there's anything that I can help. Keep safe!

@Adrian_A 

Thank you, my apologies for the poor communication on my end. We are not looking for Quickbooks to support the reciprocity agreement. Our company does not want the reciprocity. So our question is, since we use quickbooks for our payroll, how do you suggest that we ensure that Wisconsin is getting paid the taxes? Because right now, the Quickbook payroll system is only remitting payment to Michigan (which is based on the reciprocity), which we do not want. 

We also received this email from Quickbooks yesterday (which is stating that quickbooks supports reciprocity- thus, we are very confused). Please any help is appreciated. 

QuickBooks Online Payroll Core has received the Tax Notice document remitted on your company's behalf for Wisconsin WH for the tax period(s):

  M1-2021


Our research found the following cause(s) of this Agency Discrepancy:

Filing not submitted to agency

Your company is not liable to pay or file taxes in this jurisdiction.

Since your only employee is a resident of Michigan but works in Wisconsin, your employee is subject to Michigan withholding and not Wisconsin withholding.

Thank you

Thanks for getting back to us, @ooduyebo.

As mentioned by my colleagues in this thread, QuickBooks Online (QBO) payroll system is designed to support employees who report to and work from a single work location.

To ensure that Wisconsin is getting paid the taxes, you may consider checking a third-party payroll service that allows you to complete this task, or consulting your accountant or accounting professional for further guidance.

I'm also adding these articles for future reference:

• About multistate employment payroll situations.
• Multi-state withholding matrix.

Feel free to post again or leave a comment in this thread if you have any additional questions or concerns. I want to make sure everything is taken care of for you. I'll be here to help. Have a great day!

Thank you @FritzF that provides more clarity and direction on a future direction for our organisation. It appears that the only way forward is for our organisation to enroll with another third party payroll service that supports payroll for employees that work in multiple locations, due to Quickbooks current limitation. 

However, in regards to Q42020 & Q12021 payroll tax issues (WT6 form) with the State of Wisconsin, how do we resolve this, please?

Thank you