The Tax Holding Account is a new account designed to improve the accuracy of your payroll bookkeeping in QuickBooks, angsarkis.
This account acts as a temporary holding place for tax payment funds. When you run payroll, the amount is immediately debited from your bank account by the Tax Payment System. However, since the funds aren't sent to the tax agencies until they are actually due, they sit in this account temporarily.
You also don't need to do anything on your end. Once the payments are forwarded to the tax agency, the balance will automatically move out of this account. Then, your payroll tax liability will also decrease.
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