Additional states appeared in my payroll tax setup after changing employee addresses

Hello there, @sognvalleyfarm.

Thank you for posting here in the Community. Allow me to help share information about adding address to the employee's profile in QuickBooks Online (QBO).

Once you add an address to the employee's information in QBO, QuickBooks will automatically wants you to set up taxes for the address/state you've added.

If you wish to add the correct/accurate address, you may need to set up the taxes completely just make sure to input zero (0) on the tax rate, Tax ID and UI account numbers.

For additional reference about changing employee details in QuickBooks, you may check this article: Change employee details.

Let me know if you have any other questions about changing employee address in QBO. I'm always here to help!

Why would QB prompt me for tax info for those states? Just because employee permanent addresses are out of state doesn't change that fact that they're working and paying taxes in Minnesota.

Is there something I'm missing? Because I can't believe QB would design the software this way, and force me to fill in zeroes in the state tax info field to get around it.

Is this a bug?

Thank you for the explanation. I don't know anything about reciprocity agreements, but it seems hard to imagine that I would have  to apply for an employer identification number in another state just because a seasonal employee happens to have an address there. So there should certainly be a way to specify that an employee's address is simply the permanent mailing address for payroll-related mail.

It feels not just "messy" to enter dummy numbers into QB, but also potentially legally worrisome, since I use QB directly connects with tax agencies for e-filing. 

This is very poor design. I'm really not comfortable entering dummy numbers for state tax agencies given that QB e-files many things for me. I am a very small business but often employees come to work seasonally from 3-4 different states each year. Simply including a mailing address for an employee shouldn't automatically affect my core state tax setup.

I am honestly not encouraged file formal requests to QB, as there are seemingly critical issues (such as absence of support for filing 943 forms) that have drawn requests for almost a decade with no response from Intuit. Just doesn't feel worth my time.

Hello there, Sognvalleyfarm.

As what my friend @Rasa-LilaM provided, some agencies have reciprocity agreements. This means that the employee only pays taxes in one of those states. Though, some states don't. The employee's withholding will be based on both the state of residence and the state of employment.

You may want to contact your state agency about this matter. Or, you can consult your legal adviser or accountant about this.

For now, only the Desktop version allows you to file and process the 943 form. Though, you can download the form from the IRS website.

We always appreciate customers who take the time to give us their feedback. The more requests a feedback has, the more likely it will be added to the next update. If you haven't submitted any feedback yet, you can do that by clicking on the Gear icon, then choosing Feedback.

I'll help you by passing your feedback to our management team. 

You're always welcome to post anytime if you have other concerns. Have a great day! 

I have this problem all the time.  We are in a college community, and many employees of my clients list their home address as their permanent address.  There is a box under state tax setup that will let you ignore that state.

However, Quickbooks needs to add a feature that has WORK ADDRESS, and have the state taxes default to that state.  This is the way Quickbooks Desktop works.

I have argued this fact with your phone representatives NUMEROUS times.

I've had this problem for quite some time. My business is completely within Washington state. We're on the Oregon/Washington border and do have one employee who lives in Portland, OR -- but he works 100% in Washington state. So if anything these should be the only two states QB should want to deal with.

But somewhere along the line QB added the State of WISCONSIN to our setup and keeps prompting me to finish setup. I've had a love-hate (mostly hate) relationship with QB for over 11 years and this is the first time I've seen this issue. The reply saying you can't delete a state that has no business being in your company file is ridiculous, as is telling us to make suggestions to the company. NOTHING ever gets fixed. (I've been upset for a good 8-10 years when the search function was suddenly broken. QB stated it was taken down when a  security issue was found, that it would be back in the next update. Guess what? Still waiting ... I honestly question whether the programmers have actually ever been USERS of their product?)

QB is really not user friendly, and depending on what version you use it can be quite expensive, especially when QB won't do what you need it to so you end up having to pay for third party add-ons. It's ridiculous.

Thanks for expressing your sentiments in this thread, @AmericanRV. I'm here to help make things clear about different states showing on your company.

One of the reasons could be an employee previously added from that state is no longer active. Though, it will still appear on the account to make sure that data is accurate and intact. 

We can verify by reviewing the Employee Details from the Reports menu and make sure to set the filters to All (All Employees, All Work Locations, etc).

As long as there's no paycheck or any payment history for that employee, you can delete him so the state will no longer appear. Otherwise, the system won't allow us to remove them nor the state. In this case, you'll need to contact our Payroll Support team for further assistance. 

Here's how to remove an employee in QuickBooks Online:

1. Go to the Workers tab from the left menu.
2. Select Employees.
3. Choose the name of the employee on the Employees list. 
4. Click Edit Employee, then hit Delete employee.
5. Confirm by clicking Yes.

For QuickBooks Desktop, follow these steps below: 

1. Go to the Employees menu, then select Employee Center.
2. Select All employees from the Active Employees dropdown to show both active and inactive ones.
3. Select Delete Employee, then select OK to confirm.

For your reference, check out this link to know more about making an employee inactive: Delete an employee's profile from payroll.

Here's a link with articles about managing your payroll reports in QuickBooks Desktop and Online that you can use in the future: 

• Payroll reports and forms in QuickBooks Desktop
• Payroll reports and forms in QuickBooks Online

I'd be here to listen and answer your next concerns. Have a great day ahead!

I'm having this same problem.  I have an employee who is in SC but his mailing address is in VA.  QB wants me to set up a withholding account for VA (business is in SC).  I did as QB suggests but every week I am flagged to enter VA withholding and now QB wants me to file tax return for that state.

Is there another way around this?  Is there any way to list a mailing address without it prompting me to add withholding tax info for that state?

Hi there, @BillieM1.

I'll share information on why you're required to add withholding tax information for state tax when a change in the employees' address is made.

Same as what my colleague mentioned, some agencies have a reciprocity agreement. This means that the employee only pays taxes in one of those states. Some states, however, do not. The employee's withholding will be determined by both his or her home state and his or her place of employment.

You'll want to reach out to your state agency about this concern. Otherwise, you can your accountant or legal adviser about this.

Currently, the option to file or process the 943 forms is only available in the Desktop version. Though, you can download the form from the IRS website. 

We'll appreciate it if you take the time to send us your feedback. You can submit it by accessing the Gear icon and selecting Feedback.

You can always comment back if you have other questions about state tax or QuickBooks. We're here to back you and your business. Stay safe!

I have the same problem.  We are a seasonal business and hire from out of the state all the time.  Employees are working and living in our state, Idaho, yet if we add their mailing address, QBO collects taxes and wants us to file in those states.  This should be addressed in the program.  Right now, it is holding up our ability to process W2s and QBO says it will take "up to 20 business days" to fix it.  I am frustrated with this issue.

This is what happens when you let programmers instead of tax experts set up the payroll process.  In states where there is no reciprocity agreements, the work location state requires income tax withholding and unemployment insurance by the employer.  Intuit should trust the employers to know what their obligations are for withholding and paying state taxes and allow them to select an option that states, "DO NOT WITHHOLD TAXES OR FILE THIS STATE".  

This was an option under Payroll Settings until recently.  Intuit should bring this back.

This is very frustrating.  I've paid an additional $12/month for a year (yes my fault, I should have dug into the bill more frequently) because I updated the address on an inactive employee (she move to a new state) that was terminated in 2021 so that she would receive her 2021 W2.  I had no idea that from then on I would be billed for that state.  It also makes no sense that I would delete her record or enter an inaccurate address to this but it seems those are the only solutions to stop the extra fee.  I spent nearly an hour in chat with QB staff and land on that.  There's got to be a better way.  (The sales pitch in the middle of the support chat was an added bonus.)    

While it is true some states have reciprocity agreements, others do not. Why not leave these decisions to the professionals instead of arbitrarily forcing us into doing something that is not required. I'm telling all of my QBO payroll clients to switch to another payroll provider.

Did anyone ever come up with a solution to this?  I have been in online chat for almost 3 hours trying to not register as a Wisconsin employer (I'm in CA) because of one college student who goes to school here but has a permanent address in WI.  He made $199 in the entire year 2022.  And now QB will not allow me to file my W3 because I am not registered as a WI employer.  He paid zero in taxes federally or either in CA or WI. He only had two paychecks total in December.  I am not going to register or file in a state we have nothing at all to do with.  Can anyone help?  (please do not respond about reciprocity and all that stuff spouted earlier which makes zero sense.)  I just want to file my dang tax form.  

Jumping in to help with your concern about filing W3, @Staffords Chocolates.

We can turn off the Multi-state feature in QuickBooks Online (QBO) and file W3 easily.

To do this, suggest reaching out to our Phone Support Team so they can remove the work locations for you. Here's how to contact us: 

1. Click the Help icon and under Assistant, enter Talk to a human twice.
2. Select Contact Customer Support.
3. Choose the best way you'll want to reach out to us.
    

For other payroll concerns, you can check out this article: Payroll 101
 

For more details on handling your employee information, you can check out these links:

• About multistate employment payroll situations
• See what's new with QuickBooks Online Payroll Core, Premium and Elite
   

You can always leave a reply on this thread if there's anything else you need when filing payroll forms. We're here to help. 

In classic QB Support fashion, you didn't even read my post.  I was pretty clear I'm in California and trying to avoid registering as an employer in Wisconsin.  This is just one example of why everybody finds QB support so frustrating to deal with. I would rather do most anything before I choose to get on chat or the phone with you people.  

Can anyone from the community actually help? 

I was hoping for an answer also - I'm having the same problem. NC employer has one employee living in VA - trying to get VA removed but QB wont let me and now I can't finalize the payrolls set up.  This is ridiculous!

Hey there, @ameenalewis75.

I'd be glad to clarify QuickBooks' way when setting up payroll.

QuickBooks generates the forms and taxes to set up based on the employee’s residence and work locations, that's why in your case, QB is routing you to finish setting up payroll using the state of VA. We want you to follow your tax laws, so the software will ask you for and prompt you to enter the data for each state. Even if the company and the employees are located in different states, some organizations have reciprocity agreements and may require employers to file and pay taxes for each state.

For now, an option to remove the incorrect state is not available. With this, we'll initially have to finish setting up payroll. Just make sure to enter 0 for the rates and dummy account numbers. 

Also, you might want to submit feedback to our Product Developers so they can consider adding this option in the future. To do so, please follow the steps below:

1. Click the Gear icon in the upper-right corner.
2. Select Feedback under Profile.
3. Share your feedback.
4. Click Next to submit.

You can refer to this link so you can track the status of your request and get the latest updates from our development team: QuickBooks Online Customer Feedback

Here's a link with articles about managing your payroll reports in QuickBooks Online that you can use in the future: Run payroll reports in QuickBooks Online.

Stay in touch if you have other concerns or questions about payroll set-up in QuickBooks. I’ll jump right back in to answer them for you. Have a good one.

This response is similar to the non-response I got from an Accountant Care Team member who suggested I "make up an address" for the employee who lives in NC in VA so my client doesn't have to deal with trying to get their taxing agencies corrected in QBO.  You are seriously asking us to set up a "dummy" state agency rather than just fix the problem.  It is clearly a bad programming default.

Is there still not a solution for this? Attempting dummy account numbers didnt even work for me in QBO. I had to manually change my employee's addresses to make this go away

Just to be clear, Quickbooks "want[s] you to stay compliant with your tax regulations" and then directs its customers to enter "dummy" numbers into tax forms filed with states where businesses do no business and owe no taxes? This is bad design, and bad advice.  It's incumbent upon business owners to know which states have reciprocity, not for Quickbooks to mandate.

No offense, but your response is a multiple repeat of the same response given by multiple QB mods and employees. It doesn't fix the problem. And we don't need the same response numerous times. As another commenter said, QB wants us to be compliant and then recommends we create dummy accounts in states in which there is no payroll nexus. That recommendation is absurd and contrary to being compliant. The fix to this solution should be fairly simple yet it continues to be ignored. One can only assume that QB's desire is to ignore and frustrate its customers, force clients into creating fictitious accounts and create instances of non-compliance while preaching QB is trying to get us compliant. Thanks for nothing QB!

PS. If you are a mod or employee and plan to post some BS response regurgitating the same old responses you've posted numerous times, please do us and yourself a favor by not responding.