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0.00 or no income tax withheld from paycheck

Federal and state income tax are withheld in accordance with IRS Publication (Circular E), Employer’s Tax Guide. If a paycheck shows $0.00 or no income tax withheld, it may be caused by any of the following:

  • They are not meeting the taxable wage base

    A good indicator of why income tax was not withheld from the employee's paycheck is to review their gross pay and tax status.

    For example, if they are married, paid twice a month, and their gross for one paycheck is $300, most likely they’re not meeting the taxable wage base to have income tax withheld from their paycheck.

  • They were set to Do Not Withhold for federal and state income taxes in the employee setup.

    An employee’s preference should only be set to Do Not Withhold if they explicitly claim exemption from withholding on their Federal Form W-4 or any applicable state form.

    To check if an employee was set to Do Not Withhold:

    Intuit Online Payroll

    1. Select Employees, then the appropriate employee.
    2. In the Taxes and Exemptions section, check the Federal Filing Status/State Filing Status.

    QuickBooks Online Payroll

    1. Select Payroll menu, then Employees.
    2. Select the name of the employee.
    3. Select the edit (pencil) icon beside Pay.
    4. Next to the withholding section, select the edit (pencil) icon.
    5. Check the Federal Filing Status/State Filing Status.

    Intuit Full Service Payroll

    1. Sign in to your account.
    2. Select the Employees tab, then the employee's name.
    3. In the Taxes section, select Edit.
    4. Check the Federal Filing Status/State Filing Status.

    QuickBooks Desktop Payroll

    1. Go to the Employees menu, then select Employee Center.
    2. Double-click on the employee’s name.
    3. Go to the Payroll Info tab, then select Taxes.
    4. Check the Filing Status under the Federal and State tabs.

You can change the employee's status to withhold taxes accordingly.

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