Federal Income Tax Withholding

Let's take a look into why your payroll taxes aren't calculating.  Quentin Hoffman.

Federal taxes calculate based on the details from an employee's profile. For the federal withholding taxes, QuickBooks calculates them based on the following elements:

• Taxable wages
• Number of allowances/dependents
• Pay frequency
• Filing status

It's also possible that you've set the employee to Do Not Withhold for federal and state income taxes in the employee setup. We'll go ahead and check them out.

1. Go to the Payroll menu and select Employees.
2. Click the name of the employee, then click the Pencil icon beside Pay.
3. Go to Step2 or the part where the employee's withholding or W4 are set up, then click the Pencil icon underneath it.
4. Review the details and make sure all information is correct.
5. Click Done.

If the issue persists, I suggest contacting our Customer Care Team. They can take a closer look at this to determine why the federal taxes are not calculated. Here's how:

1. Click the Help menu in the upper-right-hand corner of your QBO account.
2. Type in "Talk to a human" in the chatbox, then press Enter.
3. Select Get help from a human.
4. Click Chat with us or Have us call you.

I've included this article for more insights into configuring reports and creating a custom payroll report in QuickBooks:

• Customize reports in QuickBooks Online.
• Run Payroll Reports
• Payroll Tax Compliance Links

Feel free to get back to us if you have other questions about withholding taxes. I'm always here to help.

How was the $55,000 calculated?

@busymom0423 

How was the $55,000 calculated?

$55,000 HoH gross income

($19,400) less HoH standard deduction

= $35,600 taxable income

$3,979 tax due on $35,600 taxable income for HoH filer

($4,000) less child tax credit

=$21 tax refund

Thank you. But, where did you get the $55,000 HoH Gross Income number from?

@busymom0423 

I just kept plugging numbers into this calculator until approximately $0 was due:

https://www.calculator.net/tax-calculator.html

Also, you can work backward from $4,000 in FIT.  A HoH filer pays $1,465 on the first $14,650 in taxable income and 12% on the amount over $14,650 up to $55,900. 

So, $4,000 - $1,465 = $2,535

$2,535 / 12% = $21,125

$21,125 + $14,650 = $35,775

$35,775 + $19,400 (std. deduction) = $55,175

I have a new employee filing as "Single or Married Filing Separately." He has one dependent, so box 3 is $2000 No other deductions, no other adjustments or other extra withholdings.  Quickbooks did not calculate or withhold any money from his first paycheck. How can I correct this?

Using the calculator provided to me above, it looks like he would have to earn $38275 before any federal taxes are withheld.  

Joining this thread, sarao.

Allow me to provide Certain factors that affect the withholding calculations are the following: 

• Agency's wage and tax calculation table.
• Employee's filing status, number of allowances, or extra withholding amount in the employee setup.
• Pre-tax deduction items are included in the paycheck.
• Changes in pay frequency (creating extra paycheck outside of normal pay schedule).
• Creating a paycheck with wages that has a lesser or larger amount than what the employee normally gets in a pay period.
•  

If you haven't performed this yet, I recommend doing so to check or correct this one that my colleague LeizylM provided you with the steps. We'll need to review your employee withholding information to confirm everything is set up correctly.

If we're done doing this and it looks like everything is all set up correctly, I recommend contacting our support team who can further check and pull up your account on file, perform the needed payroll corrections, and understand how your tax is calculated. 

Additionally, please refer to these articles for more troubleshooting solutions when payroll taxes are not withheld: Troubleshoot no income tax withheld from a paycheck.

Feel free to click the Reply button if you have other questions about calculating federal withholding in your employee’s paycheck. I’m always here to lend a hand.

Hello Rainflurry,

I have reviewed the solution you’ve shared and it's correct and accurate. Thank you for sharing your inputs to help address the issue.

We love to see members supporting one another! Have a great day.

OKAY THIS IS WHAT HAPPENED. THE ENTIRE YEAR OF 2022 MY WIFE DID NOT GET BUT $9.26 TAKEN OUT OF HER CHECK FOR FEDERAL INCOME TAX WITHHOLDINGS. I DID NOT REALIZE THIS UNTIL WE RECIEVED HER W-2. SHE HAD HER W-4 MARKED AS MARRIED FILING JOINTLY. I DON'T UNDERSTAND WHAT HAPPENED WITH QUICKBOOKS PAYROLL, ALL OF MY OTHER EMPLOYEES WERE WITHHELD JUJST FINE.

I'd also feel the same if I were in your position, @bhrysh.

There are a few possible instances to further determine why your wife only withheld $9.26 for the entire year of federal income tax withholding.

This needs a screen-sharing session to investigate this matter and be corrected if need be. That said, I suggest contacting our QuickBooks Online Payroll Support team. I'll show you how: 

1. Go to Help (?), then click Contact Us.
2. Please enter your question and select Continue.
3. Review and Select from the following: Ask the community, Have us call you, or Chat with us.
   
   
   

Moreover, I've added this article if you want more information on why an employee's federal or state income tax is 0.00 in QuickBooks: Troubleshoot no income tax withheld from a paycheck.

If there is anything else I can do to assist you with QuickBooks, particularly payroll-related activities, you can reach out to the Community at any time. I'll be standing by for your response. Have a great day and stay safe.

This is not an answer...sending us to this article and that article. I have been dealing with the same FOR 3 YEARS running. I HAVE SAT ON THE PHONE FOR umpteen hours, DOING THE SAME CHANGES, TO SO CALL CORRECT THIS INTERNAL ISSUE. IT IS  A QB ISSUE. CLASS ACTION SUIT IS THE ANSWER! NOT ONE PERSON @ QB can fix or give a solution. WTF?