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Set up local taxes in QuickBooks Online Payroll
by Intuit•148• Updated 2 months ago
Learn how to set up local tax withholding for your company and employees.
Local taxes are payroll taxes employees and/or employers must pay in several states. These are in addition to the required State Withholding tax. They can be city, county, municipality, or school district taxes.
Select the task you need to complete below:
- Determine which local taxes you need to set up
- Set up your employee’s local tax jurisdictions
- Add your local tax account number and deposit frequency
- Pay and file your local taxes in QuickBooks Online Payroll
- Set up QuickBooks Online Payroll to pay and file your payroll taxes and forms
Determine which local taxes you need to set up
To make sure you get the most accurate local tax jurisdictions, get the physical address for your employees’ home and work locations. If you aren’t sure what city, municipal, or school district taxes your employee is subject to:
- Contact your local tax agency
- Use the local tax resources below
State | Info/Resource |
All states with local taxes: AL, CO, DE, IN, KY, MD, MI, MO, NY, OH, OR, PA, WV | Use the USPS Address and ZIP code locator to determine the best city/ZIP code combo. We recommend Cities by ZIP code. |
Indiana | Indiana requires local taxes based on where the employee lived and worked on January 1 of the current year. Employees should complete Form WH-4. |
Maryland | Maryland local taxes are included when you set up State Withholding, so there’s nothing extra you need to do. |
Ohio | Ohio local tax finder. Use the ZIP code link and enter the 4-digit ZIP code extension for employee’s residence and work locations to find the specific applicable local taxes. If you don’t know the 4-digit extension, use the USPS Address and ZIP code locator. Note: School district taxes with 0.00% rate will not appear on the employee local tax setup. |
Oregon | Eugene Community Safety Tax Lane Transit District (LTD) tax Multnomah Preschool For All Portland Metro Supportive Housing Services TriMet transit tax |
Pennsylvania | Local Income Tax requirements for employers and link to employee residency certification form Find your PSD Code by address Set up PA Local Services Tax (LST) |
Set up your employee's local tax jurisdictions
- Go to Payroll, then Employees.
- Select your employee.
- From Tax withholding, select Edit.
- In the Local taxes section, select the applicable local taxes.
- If you don’t see the expected local taxes, select Edit location. Enter the city and ZIP code combination for the local tax jurisdiction you need. If you’re in PA, you can enter the specific PSD code.
- Pennsylvania employees: You may need to can enter the specific PSD (Political Subdivision) code. You may also need to add or edit the PSD code for the employee’s work address. See Add or edit a PSD code for PA work locations.
- Select Save.
In the Employee Profile:
- Go to Payroll, then Employees.
- Select your employee.
- From Employment details, select Start or Edit.
- Next to Work location, select Edit ✎.
- Select Save and you’ll be prompted to Add a political subdivision (PSD) code.
- Select the PSD code available based on the address you provided, or select to enter the 6-digit PSD code.
- Select Save.
In Payroll Settings:
- Select Settings
, then Payroll Settings.
- In the Work location section, select Edit ✎.
- Select Edit on the work location.
- Select Save and you’ll be prompted to Add a political subdivision (PSD) code.
- Select the PSD code available based on the address you provided, or select to enter the 6-digit PSD code.
- Select Save.
Note: Adding or editing the PSD code for a work location will affect all employees assigned to that work location. An existing PA work location’s PSD code cannot be edited once paychecks have been created for employees assigned to that work location. Add a work location instead with the new PSD code, then assign employees to it.
Add your local tax account number and deposit frequency
Once your employees’ local taxes are added, you’ll need to provide your local tax account number and tell us how often you’re required to pay these taxes. This info is needed to pay and file your taxes in QuickBooks. Contact your local tax agency if you don’t have this info.
If you’ve already run first payroll and are adding new employees
- Select Settings
, then Payroll Settings.
- In the [State] section, select [State] local taxes.
- Enter your local tax account number and select your frequency.
- Select Save.
If you’re new to QuickBooks Online Payroll and getting set up
- Go to Payroll, then Overview (Take me there).
- Select Let’s Go on the Set up your local taxes task.
- Select Edit ✎.
- Enter your local tax account number and select your frequency.
- Select Save.
Note: If you use QuickBooks Online Payroll Premium and Elite without e-services turned on or QuickBooks Online Payroll Core, you can run a payroll report to view your local tax liability amounts.
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