• January 15, 2024

QuickBooks will automatically detect all the missing withholding regarding the last payroll run. However, sometimes the QuickBooks cannot calculate the federal income tax, making users encounter the issue in calculating the income tax withholding.


While calculating federal income tax the users at times face problems that restrict them from calculating the federal income tax withholding. QuickBooks Desktop is featured for calculating percent (%) based taxes such as Federal Unemployment (FUTA), Social Security, Medicare, State Unemployment Insurance (SUI), and State Disability Insurance (SDI) incorrectly.

Federal withholding not calculating

The federal withholding taxes are not calculated for some of our employees. They are all using the 2020 W-4 form, which I have entered correctly. Please do not suggest the following, as none of it applies to them.

"Here are some possible causes that may affect the tax calculation on your employees' paychecks:"

  • The total annual salary exceeds the salary limit.
  • The gross wages of the employee's last payroll are too low.
  • The tax table is not updated.

These tax amounts may appear on the paycheck as:

  • The tax amount shows $0.00.
  • The tax amount collected is wrong (over or under-collected).
  • Tax items do not show at all on paychecks.
  • Tax amount continues to be collected after the annual limit has been reached.

Different QuickBooks versions have different processes to find the solutions, that's why business owners need to consult with a certified CPA or bookkeeper to fix this issue. Enterprise Customers need to contact QuickBooks Enterprise Support Telephone Number to discuss the exact issue.

Payroll Wage and Tax calculations are derived from the payroll data and transactions you entered in QuickBooks Desktop. To ensure accurate calculation of wages and tax amounts, your employees and payroll items should be set up correctly.

It is a recommended practice to run payroll reports regularly to review your employee(s)' payroll data so you can catch mistakes before the tax filing season.

If the tax calculation error exists only on a specific paycheck:

  • See below to learn how QuickBooks Desktop calculates payroll taxes. This may explain why the paycheck shows the tax amount as $0.00 or under-collected.
  • To fix a paycheck that has wrong tax calculation follows the steps recommended by Intuit.
  • If your employee's quarter (qtd) or year-to-date (YTD) wage and/or tax information is wrong, see the steps below
    • Check the accuracy of tax setup in the employee profile. Follow the steps accordingly.
    • Verify the tax settings for payroll items used on your employees' paychecks. Follow the instructions below:
      • Verify from the payroll item list that your tax items have the correct tax rates.
  • If payroll items and employees are set up correctly yet you are unable to determine the cause of the discrepancy, proceed with the steps below.
    • Review your Payroll Data to locate the discrepancy and identify the source:
    • Fix employee's quarter or year-to-date tax and wage discrepancies by following the steps below:
      • If the above solutions recommended by Intuit do not work and still the problems persist you can call QuickBooks customer service support. The proactive customer support team includes expert Pro Advisors, skilled and capable of resolving errors instantly.
Get help for Filling FEDERAL INCOME TAX in QuickBooks

Customers can avail of third-party services by calling QuickBooks Proadvisor Support phone at smbaccountants.com for quick and prompt responses. Here no long queues to wait for and not even a help desk team in hurry to a close customer issues.

Frequently Asked Questions

What are the Possible Causes of Federal taxes that won’t Calculate correctly?

  • The employee’s last payroll gross wages are low
  • When the total annual salary crosses the salary limit
  • Outdated latest payroll update

How can I pull the Federal Withholding in QuickBooks desktop manually?

  • Locate the main menu and click on the Reports option
  • Choose Payroll Summary below Employee & Payroll
  • Ensure you choose the suitable date range and other associated fields that require to be sorted

What are the uses of federal income tax?

Federal income taxes help in national programs like veterans, national defense, foreign affairs, physical, human, social programs, community development, social programs, law enforcement, and national debt interest.

How can I calculate Income Taxes?

Initially, you calculate the adjusted gross income through the sum of household income and then reduce it with items like contributions to 401K. Now, subtract the deductions and exemptions from the AGI for taxable income.
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