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NickG-VA
December 11, 2025
Question

QuickBooks Online prompts me to setup payroll taxes in a state we don't do business in

  • December 11, 2025
  • 1 reply
  • 14 views

Hello,

 

We recently moved to QuickBooks Online from Premier. I have an employee that goes to school in another state but comes back to us during school breaks and the summer to work. We still use paper checks per the owner's preference. I typically mail their last check to the supplied school address and had no issue with this in Premier. After the swap to Online, I'm constantly being prompted to setup taxes in a state I don't do business in and that our employee is not working in.

 

During the initial setup to begin payroll, we entered their previous in state address as "Home" (it was their parent's address), and their school address as their mailing address. However, when printing paychecks, it doesn't use the supplied mailing address on their paychecks, so I've had to manually write their address on a closed envelope to mail their checks. What is the workaround to remove this prompt? I'd like there to be no issues when we send their W-2s out.

 

Thank you for any help in this.

1 reply

A
Aldren18QuickBooks Team
QuickBooks Team
December 11, 2025

Hi, Nick. I appreciate your detailed explanation. Let's ensure that your QuickBooks Online Payroll taxes apply to the correct state.

 

QuickBooks Online (QBO) Payroll determines state and local payroll taxes from each employee’s home address and work location. Misclassification can occur when these details are incorrect, resulting in tax or work settings defaulting to the wrong state.

 

To fix this, please review the employee’s home address and work location. Make sure the home address reflects the employee’s current residence, and ensure the work location matches your actual operations.

 

Here's how:

 

  1. Go to the Payroll section in QBO.
  2. Navigate to the Employee list and choose the affected employee.
  3. Verify the home address and work location under the Personal Info and Employment Details tab.

 

Regarding paycheck printing, please note that paychecks use the employee’s Home Address since QuickBooks relies on this information to determine payroll tax requirements for the state. In contrast, the Mailing Address is only used for year-end tax forms, such as W-2s.

 

I've included a screenshot to help locate these sections:

 

 

If the issue persists after these steps, I recommend contacting our Live Support team. They can thoroughly investigate and resolve this issue.

 

I’ll ensure this conversation remains open for any future communications.

N
NickG-VAAuthor
December 15, 2025

Hello,

 

I should have mentioned in the initial post that I already ensured the proper work address was stated for each employee.

 

The system is not using their mailing address, instead defaulting to their home address. I want to use their new address as the Home Address. However, I'm being prompted to set up tax information for states we do not do business in based solely on the employee's home addresses, and it's stalling my ability to complete payroll unless I use their prior in state addresses. This is much more prevalent now than when we first transitioned to QBO in October as exam season is over and several of our college students are back to work.

 

Upon further investigation, QBO is prompting us for tax information in 3 states for employees who are terminated and supplied us their new out-of-state addresses. Though, I'm assuming since they are terminated it's not forcing me to enter tax information to process payroll.

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