Does QBs handle multi-state tax withholding on employees for payroll?
QuickBooks does not handle this very well if the Employee works in multiple states during the same payperiod. One way to handle this (although it is not perfect) is to create two paychecks. One that records the hours and calculates the State withholding for State A, and a second check that records the hours and State withholding in State B. For each check you will have to go into the Employee Record and change the “State subject to withholding” for the appropriate state. Doing it this way, however, will impact the Federal Income Tax withholding amount. By splitting the taxable wages across two paychecks, it is likely the the FIT will be slightly under withheld. That is to say that the FIT total on the two paychecks will likely be less than the FIT would be if the taxable wages were all recorded on a single pay check. Both State withholding amounts will be reported on the W-2. I hope this helps. Let us know by marking this post as “Solved” or “Helpful”, or post back with more informatio
