Why QuickBooks Payroll is Not Taking Out Taxes and How to Resolve It?

on December 08 at 11:22 AM

There are a variety of ways in which QuickBooks payroll can facilitate more efficient management of payroll processes. Payroll administration processes, stocktaking, salary computations, tax filing, payrolls, etc., can all be streamlined with its help. Unfortunately, the QuickBooks payroll is riddled with errors. When QuickBooks payroll is not taking out taxes, it's the most prevalent and costly payroll problem.

In this blog, we’ll figure out the causes, symptoms, and several methods to help solve the issue. Let’s understand this by understanding the triggers first.

Causes and Symptoms of QuickBooks Payroll is Not Taking Out Taxes Error

Triggers Causing QuickBooks Payroll is Not Taking Out Taxes

QuickBooks payroll is unable to calculate taxes for several reasons. Some of the most crucial reasons are included below: 

  • First, you may be processing payroll with an outdated version of QuickBooks. 
  • The annual compensation is above the yearly cap. 
  • Third, the worker's latest gross compensation was relatively low.

Symptoms of the Problem

This QuickBooks payroll issue has all the hallmarks of an impending disaster. The following is a rundown of such items: 

  • The computed total was off by a considerable margin. 
  • Paycheck deductions and credits are hidden from view. 
  • A sum of zero appears to be the result.

Methods to Resolve The Payroll Calculation Issue

QuickBooks payroll not taking out taxes is one of the most tedious issues of all time. However, there are several ways to resolve this. 

Method 1: Incorrect Information of the Employee

Each active worker's tax liability is detailed in a separate withholding report. The following steps are part of this process:

  1. Go to “Reports” and navigate toward “Employees and Payroll.”
  2. Select “Employee Withholding
  3. Click on “Customise Report
  4. Select the columns as required
  5. Choose the “Items” to display on the report from the display list tab
  6. Click “OK” and “Save” the applied changes
  7. Ensure that your employees are set accordingly to state, local and federal taxes
  8. Go to “Employee Name” to edit the employee details
  9. Now, the employee information screen will be visible to you
  10. Go to the “Payroll” tab and click on the “Taxes” option
  11. Now, locate the “Federal, State, and Other” option
  12. Here, make sure the employee is correctly marked for taxes

Method 2: Verify Your QB Subscription

  1. In this method, you can initiate the process by saving the “Paycheck of the Employee.” 
  2. Modify the “Check Details” and ensure there are accurate calculations
  3. Now, input the “Withholding and Employer” in the QB application
  4. If you have already subscribed to the payroll version, then the problem might be because of “Payroll taxes” already filed by Intuit
  5. To avoid this, update the latest release of the QB desktop application
  6. Before launching the payroll, ensure “Employees and Payroll Items” are valid

Method 3: Ensure Your Annual Limit is Reached

There may be a mark in the box for an annual limit and a default limit the employee has reached. You can make sure everything is set up correctly by:

  1. Choose “Lists” and go to “Payroll Item List.” 
  2. Right-click on the item you want to change and select “Edit Payroll Items.”
  3. Click “Next” until you get “Limit Type.”
  4. Check if the box is valid. If the limit is correct, the payroll will stop calculating at the input limit, or you can also update the invalid amount.
  5. Go to “Limit Type” and make sure that the option chosen is valid
  6. Modify the default limit or “Limit Type” according to your requirements
  7. Proceed ahead by selecting “OK.”

Method 4: Revert the Employee’s Paycheck

Reverting to the regular paycheck is simple, but there are three steps you must follow carefully:

  1. Open “Employee’s Payroll Information”.
Pay Employees Image 255x300
  1. Click right on the employee name marked with a yellow collar
  2. Select “Revert Paycheck”.
Revert paycheck Image 1024x649

Method 5: Payroll Updates Option

  1. Launch your QuickBooks application
  2. Go to “Employees” and choose the “Get Payroll Updates” tab
  3. Locate the “Download Entire Payroll Update” tab and select “Update.”
  4. Wait for the process to finish.

Final Words

All the above-discussed methods are capable of resolving payroll calculation issues. In this post, we’ve tried our best to explain how to fix the problem wherein your QuickBooks payroll is not taking out taxes. We believe that the information provided was of use to you. 

If you face any father issues related to QuickBooks. Then feel free to contact us at +1800-615-2347. Our highly experienced and well-trained QuickBooks experts will assist you.

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