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Getting the Most out of QuickBooks

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on  ‎October 13, 2022 03:45 PM  - last edited  4 weeks ago

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Welcome to the QuickBooks Online Payroll blog, where we will regularly add helpful content related to payroll taxes and payroll compliance topics. Did your state enact a late-announced rate change? On the lookout for information on a new tax that was recently announced? Check back regularly, as we will provide critical payroll compliance news and alerts to your business here!

QuickBooks Payroll Compliance Updates by Month:

 

 

August 2025

 

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Minnesota Paid Family Medical Leave program

Starting in 2026, Minnesotans will have access to a new paid leave program, providing financial support and job protection for life's most significant moments. The Minnesota Paid Family and Medical Leave (PFML) program, administered by the Department of Employment and Economic Development (DEED), is designed to help employees take time off for their own serious health conditions, to care for a family member, to bond with a new child, or for certain military or personal safety reasons.

Here's a breakdown of what you need to know about the program, including premium rates, employer and employee eligibility, and key resources.

Premium Rates and Contributions

The PFML program is funded by a premium on employee wages, which is shared by both the employer and employee.

  • Premium Rate: For 2026, the premium rate is set at 0.88% of an employee's wages.
  • Contribution Split: The total premium is split evenly between employers and employees. This means each will contribute 0.44% of the employee's wages.
  • Small Employer Rate: Employers with 30 or fewer employees may be eligible for a reduced employer premium rate of 0.22%, as long as their average employee wage is less than 150% of the statewide average weekly wage. Employees at these businesses will still contribute the standard 0.44%.
  • First Payments: The first premium payments are due from employers by April 30, 2026, based on wages from January 1, 2026, through March 31, 2026. Employers can begin deducting the employee portion of the premium starting January 1, 2026.

 

Employee and Employer Eligibility

The Minnesota Paid Family and Medical Leave program is designed to be broadly inclusive.

  • Employee Coverage: The program covers nearly all employees in Minnesota, including full-time, part-time, temporary, and most seasonal employees, as long as they have earned at least $3,700 in the last year. Self-employed individuals and independent contractors can voluntarily opt into the program.
  • Employer Coverage: Nearly every employer in the state is covered, regardless of business size or number of employees.

 

Additional Program Details

While every state with paid leave is different, Minnesota’s premium rate ranks 4th lowest out of 14 state programs for cost to employers and employees. For large employers who already offer private paid leave plans, the move to a state plan will often result in cost savings. And for small employers, Minnesota Paid Leave will make a critical employee benefit affordable when it might not otherwise be. A new calculator tool will help employers and individuals estimate costs under Paid Leave. The tool gives an estimate of the premiums that will be first due in April 2026, after the program launches in January 2026.

Key Resources and Links

For the most up-to-date and comprehensive information, it is recommended to visit the official agency website.

 

Setting up and tracking MN Paid Leave in QuickBooks

QuickBooks is currently researching the new program and meeting with agency partners in advance of adding the ability to track and pay MN PFML to our payroll products. Later in 2025, we will provide detailed steps required for setting up the PFML program in QuickBooks.

 

 

 

July 2025

 

 

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Kentucky Service Capacity Upgrade Fund Update

The Kentucky Office of Unemployment Insurance (UI) recently updated their website noting that the KY Service Capacity Upgrade Fund (SCUF) tax has been retroactively updated from 0.075% to 0.00% starting with the second quarter of 2025, which ended on June 30, 2025. At the time of the announcement, most Kentucky employers had already submitted their second quarter unemployment insurance tax payments and filing.

QuickBooks reached out to the agency and they stated that the collected second quarter SCUF tax premiums would be re-routed to the UI fund. The agency will handle this directly, so there's no action needed for Kentucky employers. The SCUF rate of 0.075% assessment is deducted from the employer's regular UI tax rate, meaning the total tax paid by the employer remains the same for the second quarter.  As a result,  there will be no overpayments related to this late-announced change as the SCUF was just applied to UI taxes.

Example:

Previously if an employer's UI tax rate was 2.7%, the SCUF assessment would be calculated at 0.075%, and the regular UI tax would be reduced to 2.625%. For the second quarter, the 0.075% was just paid into the UI fund, meaning the total tax rate for the second quarter in the above example would still equal 2.7%.

Since Kentucky just redistributed the SCUF back to the UI fund, there are no over payments for the second quarter due to this rate change. However, QuickBooks will have to make some changes ahead of the third quarter payment and filing due in October. Once we decide how to handle the KY SCUF tax for the third quarter, we will contact all Kentucky employers using with further instructions.

Additional details on this rate change can be found on the agency's website.

 

 

 

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One Big Beautiful Bill Act signed into law

On July 4, President Trump signed the One Big Beautiful Bill Act into law. The law will bring some changes to the tax landscape that affect payroll, including changes to the taxation of tips and overtime pay. While QuickBooks continues to research the bill and await guidelines from the IRS, we want to provide some initial information on how this may impact your business and employees.

No tax on tips starting with Tax Year (TY) 2025

  • Only applies to federal income tax as all tips are still subject to FICA tax.
  • Effective from 2025 through 2028
  • Maximum exemption amount of $25,000
  • Exemption is in addition to the standard deduction

 

No tax on overtime pay starting Tax Year (TY) 2025

  • Only applies to federal income tax as all overtime wages are still subject to FICA tax.
  • Effective from 2025 through 2028
  • Maximum exemption amount of $12,500
  • Only applies to overtime pay exceeding the regular pay rate as dictated by the FLSA (the additional half of one and a half times pay)
  • Exemption is in addition to the standard deduction

Additional information outlining these changes can be found directly on the IRS website.

IRS Update August 7, 2025

On August 7, the IRS announced that, as part of its phased implementation of the One Big Beautiful Bill Act, there will be no changes to certain information returns or withholding tables for Tax Year 2025 related to the new law.

Key points for Tax Year 2025 relating to OBBBA provisions:

  • Form W-2, existing Forms 1099, and Form 941 and other payroll return forms will remain unchanged for TY 2025.
  • Federal income tax withholding tables will not be updated for these provisions for TY 2025.
  • Employers and payroll providers should continue using current procedures for reporting and withholding.

Additional guidance on how this will be managed for Tax Year 2026 is still being worked through by the IRS per their recent update. Check back later for additional details on how employees will be expected to report overtime or tips exempt from federal income tax for TY 2025.

Trump retirement accounts (Effective tax year 2026)

The OBBBA allows for the creation of an individual retirement account for children born between January 1, 2025, and December 31, 2028. After an initial $1,000 deposit by the federal government, parents may contribute up to $5,000 per year to the account and employers may contribute up to $2,500 to the account of an employee or the employee's dependent. Employer contributions are excluded from the employee's income. More details about these retirement accounts will be added here in the future.

What's next?

QuickBooks will continue to analyze the bill and update this post when the IRS provides any additional guidance on changes that affect payroll. We will provide all the information you need to understand how this will affect your business and your employees. Bookmark this blog post and check back for more updates soon!

 

 

 

June 2025

 

 

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New York Metropolitan Commuter Transportation Mobility Tax rate increase

Effective July 1, 2025, New York's Metropolitan Commuter Transportation Mobility Tax (MCTMT) employer rates will change due to the 2025–2026 fiscal year budget (A3009C), approved by Governor Hochul on May 9, 2025. 

NY's MCTMT applies to you if:

  • You're required to withhold New York State income tax from wages; and
  • Your payroll expense for covered employees in the MCTD exceeds $312,500 for both zones in any calendar quarter

How do I update my MCTMT tax rate for July 2025?

If your business is required to pay NY MCTMT tax, the rates have been changed by NY effective July 1, 2025. QuickBooks is currently working on adding the new rates into our Online Payroll product. Once the new rates are available we will contact New York employers and provide the steps to update the article. After applying the rate effective July 1, 2025, the system will auto-adjust this employer tax to calculate the correct quarter to date amount.

Review our NY MCTMT article for more information on the tax.

 

 

 

 

 

May 2025

 

 

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Alabama Overtime Exemption Act expires June 30, 2025

 

The Alabama Overtime Exemption Act is set to expire on June 30, 2025. This law exempted overtime pay from Alabama withholding tax for salaried and hourly employees. QuickBooks will be making the necessary changes to both our Online and Desktop Payroll products in advance of this change.

Any exempt overtime wages calculated between January 1 and June 30, 2025 will be reported on your 2nd quarter Alabama A-1 form and annual 2025 W2s as required. We suggest you tell your Alabama employees who get overtime pay that the Overtime Exemption Act is ending. By doing so, they will be prepared for the additional Alabama withholding tax that will be withheld on checks with overtime pay dated July 1 and after.

QuickBooks has removed the field for adding the tax exempt Alabama overtime pay for checks dated July 1 and after. If tax exempt overtime pay was added for checks dated July 1 and after before this option was removed, QuickBooks will contact your business and then create adjustments to remove the tax exempt amounts before third-quarter filings are completed.

 

 

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Minnesota Additional Assessment Calculation Update

The Minnesota Department of Unemployment Insurance (UI) reintroduced the additional assessment tax for 2025. This tax is calculated at a rate of 5% of the total MN (UI) tax calculated on each 2025 paycheck. 

QuickBooks recently identified that the additional assessment tax for the first quarter of 2025 was under-calculated for some online payroll customers.

The quarterly form was populated with the correct total wages, but the assessment may have been under-calculated.  For any Minnesota Online Payroll customer impacted, we will send a detailed communication with a full resolution soon.

 

 

 

 

April 2025

 

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Delaware Paid Family Leave Due Date Extended

The Delaware Department of Labor’s (DOL) Division of Paid Leave team has announced that that employers won't be penalized for submitting the first quarter 2025 Paid Leave payment and filing after the initial target due date of April 30, 2025. Additional work is still being done to prepare for the payments and filings. The agency has requested that third-party providers hold off on submitting returns for at least two weeks after the portal opens (the portal is expected to open on or around April 28). 

How does this impact my business?

  • If QuickBooks automatically submits payments and filings for your business, we won’t submit the first quarter 2025 DE PFML payment and filing until at least two weeks after the portal opens. 
  • For employers who manage paying and filing through QuickBooks, we will tell you when the first quarter payment and filing are ready to be submitted. 


For additional information on the updated payment and filing target due date, visit the agency’s website.

 

 

 

 

February 2025

 

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Minnesota Paid Family Leave Coming in 2026!

Minnesota Paid Leave is launching in 2026. The program aims to provide time off to Minnesotans when a serious health condition prevents them from working, or when they need time to care for a family member or new child.

There are two main types of leave provided by the program:

  • Family Leave to care for a family member with a serious health condition, or if you’re bonding with a new baby or child in your family.
  • Medical Leave when your own serious health condition prevents you from working.

Additionally, you will be able to take leave to support a family member called to active duty, or if you or a family member are facing a significant personal safety issue.

Employer Information

Minnesota has provided a wealth of information for employers to review prior to the launch of the program in 2026.  The agency announced the premium rate for payroll contributions will be 0.88%. The premium rate is a percentage of an employee's wages that will be collected by the state from employers. The premiums will be split between employees and their employers. Every state with paid leave has its own rules. Minnesota's premium rate is the 4th lowest out of 14 state programs for employers and employees.

QuickBooks Support and Additional Information

Before the start of ‌payroll contributions in 2026, QuickBooks will add the ability to set up and calculate ‌premiums. We will communicate with all Minnesota employers using QuickBooks Payroll regularly until the launch of the program.

For more information on the program, including an FAQ section, visit the Minnesota Paid Leave website.

 

 

January 2025

 

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Updated Iowa Withholding Tables and W4 for 2025

The Iowa Department of Revenue (DOR) has updated the state income tax withholding tables for 2025. It has also changed the Iowa W4 (employee withholding allowance certificate) for 2025. If you haven’t already done so, gather updated 2025 Iowa W4 forms from Iowa employees.

What action should Iowa employers take in QuickBooks?

The withholding tables have been updated for 2025 in QuickBooks. After your Iowas employees finish filling out their 2025 Iowa W-4 form choices, update their state withholding information in QuickBooks (if needed). For detailed steps on updating employee tax information in QuickBooks, review our help article. 

For more information on the Iowa 2025 withholding formulas and tables, visit the Iowa DOR website.

 

 

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Louisiana Emergency Withholding Tables 2025

The Louisiana Department of Revenue issued an Emergency Rule effective January 1, 2025, following the passage of Act 11 of the 2024 Third Extraordinary Session of the Louisiana Legislature. 

The Emergency Rule updates the withholding tables and formulas to reflect the newly enacted 3% individual income tax rate and increased Standard Deduction. 

The Louisiana Department of Revenue recently updated LA L4 (Employee Withholding Certificate) to reflect the changes in the withholding tables and deduction options for 2025.  We recommend that Louisiana employers start gathering the updated LA L4s from their employees ASAP.

QuickBooks is working on updating these late-announced changes to our payroll products. We will follow up as soon as the withholding updates are available in QuickBooks. Once we follow up, Louisiana employers will be able to update their LA withholding information for employees based on their updated Form LA L4.

 

 

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Complete the year-end checklist!

Learn how you can wrap up this year’s payroll and prepare for the next with QuickBooks Online Payroll Core, Premium, or Elite.

Whether it’s filing your taxes or sending out your employees’ W-2s, there are several things you need to get done. Go over these important dates and tasks as you plan your year-end payroll work. 

Complete the year-end checklist 

 

 

 

December 2024

 

 

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Updated Kansas Unemployment Insurance Account Number

The Kansas Department of Labor has been working on modernizing their Employer Service Portal. Along with the portal updates, the format for Unemployment Insurance (UI) account numbers is changing. Payments and filings made in January for the fourth quarter of 2024 will need to be filed using the new account number format. 

Employers who had previously been assigned a KS UI account number will now have a zero added to the beginning of the account number and three zeroes at the end. You may have recently received a notification from the KS UI agency with the new account number.

Updating the account number in QuickBooks

The account number will be automatically updated for all KS Assisted and Online Payroll employers using our service. There's no action required for employers using these payroll offerings and the updates will be completed before the end of the year.

Kansas employers using Desktop DIY Payroll will be able to update their account numbers starting on Thursday, December 19. For more information on the account number change, or to create a new user name and password to access the updated agency portal, visit the agency website.

 

 

 

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Minnesota Additional Assessment Tax Rate 2025

The Minnesota Department of Unemployment Insurance (UI) is re-introducing the additional assessment tax for 2025. The additional assessment is triggered when the UI Trust Fund falls below a certain level as of a certain date. The additional assessment tax will be calculated at a rate of 5% for 2025. 

The rate of 5% is calculated against the total UI tax due for the quarter. Below, we will provide an example of how the additional assessment tax is calculated.

Example is based on having an overall base rate of 1%

  • Total taxable wages in the first quarter of 2025 = $10,000. Base UI rate = 1%. ‌Total UI tax = $100
  • To calculate the additional assessment tax amount, multiply the additional assessment rate (5%) x the total UI tax for the quarter ($100), which = $5 of additional assessment tax.
  • The total UI payment for the first quarter, based on $10,000 in taxable wages, a 1% base UI rate, and the 5% additional assessment tax would be $105 ($100 UI tax + $5 additional assessment tax)

Does QuickBooks support the Additional Assessment tax?

Yes, just like in previous years when the additional assessment was active in Minnesota, QuickBooks will support this tax calculation. For our online customers, we automatically calculate the assessment based on the UI rate entered in payroll.

Remember to change your 2025 Minnesota UI rate in QuickBooks if it has changed! You can validate your rate on the agency's website. Then, follow the steps to apply your 2025 rate in QuickBooks as described in our SUI article.

 

 

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Setting up Delaware Paid Family & Medical Leave in QuickBooks

Effective January 1, 2025, payroll contributions to Delaware's new Paid Family & Medical Leave (PFML) program will begin. The ability to set up DE PFML in QuickBooks Online Payroll is available starting Saturday December 7!

All DE employers (regardless of employee size) using must set up their Delaware PFML policy in QuickBooks by December 19. Employers with less than 10 employees must mark themselves as exempt. Starting December 19, we will temporarily block the ability to run payroll for employees with a Delaware work location until the policy is set up and assigned. This will be done to make sure you are in compliance with the new PFML program. Follow the steps below to comply with the new state program and to help ensure there are no delays to your payroll processing!

Setting up DE Paid Leave in QuickBooks:

To set up your policy in QuickBooks, follow each step outlined in our detailed DE PFML Article. Add the appropriate policy based on how many employees you have. Employers are responsible for all contributions required by the program, but can deduct up to 50% of the required contributions from employee wages. You will be able to choose the employer and employee rate share when setting up your policy. You can also add the account number assigned to your business after registering on the DE LaborFirst website.

Registration and account number:

The ability to register for DE PFML on the DE LaborFirst site began on September 23. If you haven’t already done so, register your business by following the steps on the agency's website. If you have less than 10 employees and are exempt you do not need to register with the agency and can leave the account number field in QuickBooks blank.

After you register your business, you will get a 7 or 8-digit PFML account number. Enter this number in QuickBooks when you set up your policy. If your account number is 7 digits, add a leading zero before entering the following 7 digits. Before registering, make sure to have the following registration info ready! Registration checklist

Employer eligibility and program details: 

DE employers with 10 or more employees working in DE or reclassified as working in Delaware are required to begin calculating these new taxes on paychecks dated January 1, 2025 and after.

The total payroll contribution of 0.80% consists of 0.32% parental leave, 0.4% medical leave, and 0.08% family caregiving benefits. Employers can require employees to contribute up to half the cost.

  • Employers with 0 to 9 employees are exempt
  • Employers with 10 to 24 employees are only required to provide parental leave
  • Employers with 25 or more employees are required to provide full coverage.

 

For more additional information on program details and employer eligibility, review the agency’s FAQ’s.

 

 

 

 

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Setting up Maine Paid Family & Medical Leave in QuickBooks

Maine's Paid Family & Medical Leave (PFML) program goes into effect January 1, 2026, with payroll contributions beginning January 1, 2025. The ability to set up your policy in QuickBooks will be available starting December 7 and Maine employer must set it their policies in QuickBooks Online Payroll by December 27 at the latest! 

Note that due to the agency finalizing their rates late, the tax won't be calculated right now if you create paychecks dated in 2025. However, it’s still critical to set up your policy in QuickBooks by December 27. If you don’t add a policy by December 27, we will temporarily block the ability to run payroll for employees with a Maine work location until the policy is setup. 

Before the end of the year, we will create adjustments to add the ME PFML tax based on the policy you set up for any 2025 for any checks created before the calculation was added to QuickBooks.  Any ME PFML tax not originally withheld for these future-dated checks will be collected on their next check.

Setting up ME PFML policy in QuickBooks

To set up your policy in QuickBooks, follow each step outlined in our detailed ME PFML Article. Add the appropriate policy based on how many Maine employees you had between October 1, 2023 and September 30, 2024.

Tax contribution rates:

  • Employers with fewer than 15 employees are exempt from the employer share but must withhold a 0.5% contribution rate from employees. The employer can pay for this or deduct it from the employees’ wages. 
  • Employers with 15 or more employees are subject to a 1% contribution rate. Employers and employees can share ‌costs, meaning employers can pay 0.5% of the contribution, and employees will pay 0.5%. 

Exemptions:

  • Any employee or employee subject to the Railroad Unemployment Insurance Act
  • Federal government, including tribal government
  • Any public employer and employee subject to a collective bargaining agreement in effect on October 25, 2023, won't be required to make PFML contributions until that agreement expires. 

Registration/Account Number:

The online system for employers to register for ME PFML is not yet available. We will inform all Maine employers once the ability to register is available. For now, leave the account number field in QuickBooks blank. 

Private Plans:

Employers who offer their own paid leave program may apply for an exemption. The ability to apply for exemptions won't start until April 2025. This means all Maine employers that aren’t exempt will have to pay the contributions for at least the first quarter of 2025.

 

For additional information on the new program, visit theagency’s website.

 

 

 

 

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Connecticut's Updated Sick Leave Law Effective January 1, 2025

Governor Ned Lamont signed the Public Act 24-8 Bill, which will expand Connecticut's sick leave law, starting January 1, 2025. The expanded sick leave law will apply to workers of nearly every occupation, not just those in retail and service jobs. (Seasonal employees and other certain temporary workers are exempt.)

The threshold for coverage will be lowered in three phases, beginning with employers that have at least 25 employees on January 1, 2025; those with at least 11 employees beginning January 1, 2026; and those with at least one employee beginning January 1, 2027.

Accrual rate

Employees will earn one hour of paid sick leave for every 30 hours worked, up to a maximum of 40 hours per year. 

Use of sick leave
Employees can use paid sick leave for a wider range of reasons, including:

  • Their own health needs
  • Caring for a family member
  • Attending a medical appointment with a family member 
  • Responding to public health emergencies 
  • Mental health days 

Carryover of unused sick leave
Employees can carry over up to 40 hours of unused sick leave into the next year. 

Notice to employees
Employers must provide written notice to each employee by January 1, 2025, or at the time of hire, whichever is later. 

Documentation
Employers can no longer require documentation to establish that leave is being taken for a covered purpose. 

Accrual

Employers can provide leave through accrual or a lump sum. If a lump sum isn't provided at the start of the year, a carryover of the sick hours is required. 

Tracking CT Sick Leave in QuickBooks

For CT employers that use QuickBooks Payroll, we fully support the ability to track sick leave, whether you use QuickBooks Desktop or Online Payroll. For employers that are already tracking paid time off in QuickBooks Payroll (Desktop or Online), you’ll need to review your current paid time-off (PTO) policy(s) to help ensure you meet the minimum requirements outlined above. If you aren’t currently tracking paid time off, you can set up a new policy to track ‌CT Paid Sick Leave. Follow the steps outlined in our PTO article for detailed instructions on setting up, or adjusting paid time off for your employees.

For more information on the new sick leave law, visit the CT Department of Labor website.

 

 

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New York's Prenatal Leave Law Effective January 1, 2025

Beginning January 1, 2025, New York’s Paid Prenatal Leave law will go into effect. The law says that private employers must give pregnant employees 20 hours of paid leave before they have a baby. This means that pregnant employees can take time off for medical appointments related to pregnancy without worrying about losing income.

Who does the law apply to?

Paid Prenatal Leave applies to all private employers in New York state, with no minimum employee threshold. Prenatal leave is applicable to both full-time and part-time employees. Pregnancy-related health care includes physical examinations, medical procedures, monitoring, testing, and discussions with a health care provider related to the pregnancy.

Use of Paid Leave 

This personal leave time may be taken in hourly increments, and compensation provided must be at the employee’s regular rate of pay or the applicable minimum wage, whichever is greater. Employers aren't required to pay an employee for unused prenatal personal leave at the time of separation from employment.

Tracking Paid Prenatal Leave in QuickBooks

QuickBooks fully supports the ability to track prenatal leave, whether you use QuickBooks Desktop or Online Payroll. For employers that are already tracking paid time off in QuickBooks Payroll (Desktop or Online), you’ll need to review your current paid time-off (PTO) policy(s) to help ensure you meet the minimum requirements outlined above for any employee that requires prenatal leave. If you aren’t currently tracking paid time off, you can set up a new policy to track ‌New York Prenatal Leave for any eligible employee. Follow the steps outlined in our PTO article for detailed instructions on setting up, or adjusting paid time off for your employees.


For more information about Paid Prenatal Personal Leave and how it affects your business’s paid leave policies, visit ny.gov/prenatal. 

 

 

 

 

November 2024

 

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Michigan Earned Sick Time Act

Effective February 21, 2025, Michigan will update the Paid Family Leave Act by enacting the Michigan Earned Sick Time Act (ESTA). The Paid Family Leave Act was only for bigger businesses (50 or more employees). The expanded Earned Sick Time Act will affect all Michigan employers with 1 or more employees (except for those employed by the US Government). 

Key Provisions

  • Employees accrue sick time ast a rate of 1 hour for every 30 hours worked
  • Businesses with 10 or more employees must allow at least 72 hours of paid sick time per year to be used to the extent the leave is accrued
  • Businesses with fewer than 10 employees must allow at least 40 hours of paid sick time annually, plus an additional 32 hours of unpaid sick time to the extent the leave is accrued.
  • Unused sick time can be carried over, but employer may limit annual use to no more than 72 hours
  • Employees have the right to pursue action if an employer interferes with or retaliates against use of ESTA benefits, including through private action.

 

When can employees use sick time?

  • The employee’s mental or physical illness, injury, or health condition; medical diagnosis, care, or treatment of the employee’s mental or physical illness, injury, or health condition; or preventative medical care for the employee.
  • For the employee’s family members mental or physical illness, injury, or health condition; medical diagnosis, care, or treatment of the employee’s family members mental or physical illness, injury, or health condition; or preventative medical care for a family member of the employee.

 

Tracking Michigan Earned Sick Time in QuickBooks Payroll

QuickBooks fully supports the ability to track Michigan Earn Sick Time whether you use QuickBooks Desktop or Online Payroll.  

If you are already tracking paid time off in QuickBooks Payroll (Desktop or Online), you’ll need to review your current paid time-off (PTO) policy(s) to help ensure you meet the minimum requirements outlined above. If you aren’t currently tracking paid time off, you can set up a new policy to track ‌Michigan Earned Sick Time.

Follow the steps outlined in our PTO article for detailed instructions on setting up, or adjusting paid time off for your employees.

For more information on Michigan’s Earned Sick Time Act, we recommend that you visit the agency's website.

 

 

 

October 2024

 

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DE Paid Family Leave Registration and TPA Access

Effective January 1, 2025, payroll contributions to Delaware's new Paid Family & Medical Leave (PFML) program begin. Below, we have outlined critical program and registration details as well as steps for assigning QuickBooks as your Third Party Administrator (TPA).

Employer Eligibility

DE employers with 10 or more employees working in DE or reclassified as working in Delaware are required to begin calculating these new taxes on paychecks dated January 1, 2025 and later. Depending on employer size, DE businesses are required to contribute to different portions of the program. Employers with 9 or fewer employees are exempt. 

Program details

If leave is approved, employees will get up to 80% of their wages (up to $900 per week) to cover care for a new child or family member, to address a serious personal health condition, or to help loved ones who are on overseas military deployments.

The total payroll contribution of 0.80% consists of 0.32% parental leave, 0.4% medical leave, and 0.08% family caregiving benefits. Employers can require employees to contribute up to half the cost.  

  • Employers with 10 to 24 employees are only required to provide parental leave
  • Employers with 25 or more employees are required to provide full coverage.

 

What if I offer a private plan with equal or greater paid leave options?

Your business will need to apply for approval of your private plan. The window for approving private plans is September 1, 2024 to December 1, 2024. 

Registration is now open!

Employers are now able to start setting up their account using the DE LaborFirst online portal. Register your business by following the steps on the agency's website. After registering your business, you will be provided with an 8-digit PFML account number. We will notify QuickBooks Payroll customers later in 2024 when the ability to add that account number in QuickBooks becomes available.

Before registering, make sure to have the following registration info ready! Registration checklist

Assign QuickBooks as your TPA

To send Delaware Paid Family & Medical Leave payments and filings through QuickBooks, you need to add us as your TPA. To assign QuickBooks as the TPA for your business, complete the following steps:

  • Sign up for an account and then login to Labor First
  • Select Account Services and then Add/Manage TPA Access
  • Select New to open the “New Entity Relationship” window
  • Search for the following based on the QuickBooks product you use:
    • Online Payroll customers - Search for QuickBooks Online Payroll Inc TPA Account Number: 6000633 in the TPA field
    • Assisted Payroll customers - Search for Computing Resources, Inc TPA Account Number: 6000641 in the TPA field
  • Select the Current Date for start date
  • Leave the End Date field blank as it isn't required
  • Choose Administrator as Authorization Type

 

Tracking the DE PFML contributions in QuickBooks

QuickBooks Desktop Payroll customers can begin setting up and tracking the DE PFML contributions in their accounts already. QuickBooks Online Payroll customers will be able to do this later in 2024. Steps for Desktop Payroll are available in our DE PFML community article, and the Online Payroll steps will be added later in 2024.

Visit our DE PFML Article

For more information on signing up for a Labor First account and on TPA access, visit the agency's FAQ section.

 

 

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Maine Paid Family Leave Program

Maine's Paid Family Leave program goes into effect January 1, 2026, with payroll contributions beginning January 1, 2025. The program provides eligible workers in the private and public sectors 12 weeks of paid time off available to them for family or medical reasons, including illness, to care for a relative, or for the birth of a child. 

Eligibility and Tax Rates

All employers will employees working in Maine are subject to the tax.  Employers with 15 or fewer employees are exempt from the employer share but must withhold a 0.5% contribution rate from employees. The employer can pay for this or deduct it from the employees’ wages. Employers with 15 or more employees are subject to a 1% contribution rate.  Employers and employees can share the costs, meaning employers will pay 0.5% of the contribution, and employees will pay 0.5%. 

Exemptions:

  • Any employee or employee subject to the Railroad Unemployment Insurance Act
  • Federal government, including tribal government
  • Any public employer and employee subject to a collective bargaining agreement in effect on October 25, 2023, won't be required to make PFML contributions until that agreement expires. 

 

Employers who offer their own paid leave program may apply for an exemption. The ability to apply for exemptions won't start until April 2025. This means all Maine employers that aren’t exempt will have to pay the contributions for at least the first quarter of 2025.

Setting up and tracking ‌payroll contributions in QuickBooks

QuickBooks is currently working on adding the new Maine Paid Leave contribution to our payroll systems.  We will support the ability to calculate the payroll contribution for each use case whether you have 15 employees or less.  As soon as the ability to set up the new Paid Leave contribution is available later in 2024, we will contact Maine employers using QuickBooks Payroll.

For additional information on the new program, visit the agency’s website.

 

 

 

September 2024

 

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Instructions for activating or turning off auto tax payment feature

This update is intended for QuickBooks Online Payroll customers who received an in-product notification directing them to this blog post. If you received an in-product notification linking you here, please review the following critical update about your automatic payroll payment and filing service:

Your business chose the option for QuickBooks Online Payroll to pay and file your payroll taxes automatically on your behalf, but you have not completed the enrollment process for one or more applicable states to activate the auto pay and file feature.** 

If you want QuickBooks to file and pay your payroll taxes automatically for you, please complete the tax setup enrollment process for your taxes by September 30, 2024.  If you do not complete tax setup by then, starting in October you will be responsible for filing and paying payroll taxes in these states on your own, according to the applicable deadlines.

How do I complete the payroll tax setup for my business?

To complete your tax setup, complete each action item in the tax setup menu. 

You must resolve the open action items in the tax setup menu by September 30, 2024, or we will no longer be able to keep filing your state payroll tax forms or begin paying your state axes automatically after this date.

While we will still send payment and filing reminders, you won't be able to take advantage of QuickBooks handling these payments and filings on your behalf automatically, and you will be responsible for filing and paying any payroll tax liabilities due in July and thereafter until you re-enroll in automatic payroll tax services and complete your tax setup.

For more info on completing your electronic payroll tax service enrollment, or for instructions on turning off the auto tax feature if you want to pay and file on your own, visit our Help Article and review our Terms of Service.

If you have any questions or need assistance completing your tax setup, please contact support.

Money movement services are provided by Intuit Payments Inc., licensed as a Money Transmitter by the New York State Department of Financial Services.  For more information about Intuit Payments' money transmission licenses, please visit https://www.intuit.com/legal/licenses/payment-licenses/.

**Features

Automated tax payments and filings: Automated tax payments and filing available for state and federal taxes. Enrollment in e-services is required for tax payments and filings only. Automated tax payments and filings for local taxes available in QuickBooks Online Payroll Premium and Elite only. 

August 2024

 

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Washington SOC Codes cannot end in 0000

This update is intended for QuickBooks Online Payroll customers who received an in-product notification directing them to this blog post.

The Washington Department of Labor and Industries recently confirmed that occupational codes reported for your employees on the quarterly unemployment form cannot end in four zeros. Codes ending in four zeros are the overarching group categories and the agency wants the specific job codes found inside each of the major 22 categories. Failure to accurately report your occupational codes on the third quarter SC unemployment filing, may result in penalties from the WA Department of Labor and Industries.

Example of the correct and incorrect ways to report the codes:

  • Correct- Category 35-2014 is a specific category for Cooks-Restaurant within the Food Preparation group. This is an example of a specific category which is acceptable.  Make sure you enter the specific job category for each employee that doesn’t end in four zeros.
  • Incorrect - Category 35-0000 is the major group for Food Preparation and Serving related occupations.  Entering this occupational code for your employees would be inaccurate and the agency may penalize your business if reported this way.

We identified that you have at least one employee where the WA SOC code ends in all zeros. You must update the occupational code for each WA employee with a SOC code ending in 0000 by September 30, 2024, so that the 3rd quarter unemployment filing due in October is populated with the accurate codes.

How do I update the WA SOC codes for my employees?

For each employee with WA SOC codes ending in 000, follow these steps to change the codes from the major category ending in four zeros, to the specific job category for your employees. 

  1. Locate the accurate code for Employees here
  2. Go to Payroll, then Employees (Take me there).
  3. Select your employee.
  4. From Employment details, select Start or Edit.
  5. Enter the occupational code. then select Save.
  6. Do the same for each applicable employee.

By completing this before October 1, 2024, you can ensure there are no issues with your 3rd quarter tax filing and avoid any penalties.  Moving forward, we have added a block to no longer allow the major groups ending in four zeros.

 

 

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South Carolina SOC Codes cannot end in 0000

This update is intended for QuickBooks Online Payroll customers who received an in-product notification directing them to this blog post.

The South Carolina Department of Labor recently confirmed that occupational codes reported for your employees on the quarterly unemployment form cannot end in four zeros. Codes ending in four zeros are the overarching group categories and the agency wants the specific job codes found inside each of the major 22 categories. Failure to accurately report your occupational codes on the third quarter SC unemployment filing, may result in penalties from the SC Department of Labor.

Example of the correct and incorrect ways to report the codes:

  • Correct- Category 35-2014 is a specific category for Cooks-Restaurant within the Food Preparation group. This is an example of a specific category which is acceptable.  Make sure you enter the specific job category for each employee that doesn’t end in four zeros.
  • Incorrect - Category 35-0000 is the major group for Food Preparation and Serving related occupations.  Entering this occupational code for your employees would be inaccurate and the agency may penalize your business if reported this way.

We identified that you have at least one employee where the SOC code ends in all zeros. You must update the occupational code for each WA employee with a SOC code ending in 0000 by September 30, 2024, so that the 3rd quarter unemployment filing due in October is populated with the accurate codes.

How do I update the SC SOC codes for my employees?

For each employee with SC SOC codes ending in 000, follow these steps to change the codes from the major category ending in four zeros, to the specific job category for your employees. 

  1. Locate the accurate code for Employees here
  2. Go to Payroll, then Employees (Take me there).
  3. Select your employee.
  4. From Employment details, select Start or Edit.
  5. Enter the occupational code. then select Save.
  6. Do the same for each applicable employee.

By completing this before October 1, 2024, you can ensure there are no issues with your 3rd quarter tax filing and avoid any penalties.  Moving forward, we have added a block to no longer allow the major groups ending in four zeros.

 

 

 

 

 

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Instructions for activating or turning off auto tax payment feature

This update is intended for QuickBooks Online Payroll customers who received an in-product notification directing them to this blog post. If you received an in-product notification linking you here, please review the following critical update about your automatic payroll payment and filing service:

Your business chose the option for QuickBooks Online Payroll to pay and file your payroll taxes automatically on your behalf, but you have not completed the enrollment process for one or more applicable states to activate the auto pay and file feature.** 

If you want QuickBooks to file and pay your payroll taxes automatically for you, please complete the tax setup enrollment process for your taxes by September 30, 2024.  If you do not complete tax setup by then, starting in October you will be responsible for filing and paying payroll taxes in these states on your own, according to the applicable deadlines.

How do I complete the payroll tax setup for my business?

To complete your tax setup, complete each action item in the tax setup menu. 

You must resolve the open action items in the tax setup menu by September 30, 2024, or we will no longer be able to keep filing your state payroll tax forms or begin paying your state axes automatically after this date.

While we will still send payment and filing reminders, you won't be able to take advantage of QuickBooks handling these payments and filings on your behalf automatically, and you will be responsible for filing and paying any payroll tax liabilities due in July and thereafter until you re-enroll in automatic payroll tax services and complete your tax setup.

For more info on completing your electronic payroll tax service enrollment, or for instructions on turning off the auto tax feature if you want to pay and file on your own, visit our Help Article and review our Terms of Service.

If you have any questions or need assistance completing your tax setup, please contact support.

Money movement services are provided by Intuit Payments Inc., licensed as a Money Transmitter by the New York State Department of Financial Services.  For more information about Intuit Payments' money transmission licenses, please visit https://www.intuit.com/legal/licenses/payment-licenses/.

**Features

Automated tax payments and filings: Automated tax payments and filing available for state and federal taxes. Enrollment in e-services is required for tax payments and filings only. Automated tax payments and filings for local taxes available in QuickBooks Online Payroll Premium and Elite only. 

 

 

 

July 2024

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DC Paid Family Leave Rate Change July 2024

The District of Columbia recently announced that effective July 1, 2024, the Paid Family Leave rate increased from .026% to .075%. The first tax payment at this rate will be due on October 31, 2024.  QuickBooks is diligently working on implementing this new, higher rate into our payroll systems and will communicate further details once the .075% rate is available.

Since DC Paid Leave is an employer-only tax, this will not impact the pay your employees receive between now and when the higher rate becomes available in QuickBooks. We will follow up with our DC payroll employers and provide a straightforward solution for adjusting the third-quarter tax before the payment due date in October. No action is required from DC businesses as of today. 

For more information on the recently announced rate change, visit the agency website.

 

 

June 2024

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Vermont Child Care Contribution Tax Online Payroll

Starting July 1, 2024, the Vermont Department of Taxes will implement and administer a new Child Care Contribution (CCC) Tax, composed of a payroll tax on wages and self-employment income tax. The Vermont Department of Taxes has issued guidance here. 

The ability to set up and track this new tax is now available in QuickBooks Online Payroll. To simplify things, we’ve set up a default policy and assigned it to your employees working in Vermont. The policy is comprised of 100% employer contribution (.44%). Follow the steps below to set up additional policies, or adjust the employer/employee contribution as soon as possible, as it will be calculated on all checks dated July 1, 2024, and after.

Key Provisions:

All employers required to remit Vermont Income Tax Withholding are subject to the Childcare Contribution tax. Employers must remit this tax for all employee wages for which they withhold Vermont income tax. The Childcare Contribution tax will be paid on the same schedule as your Vermont income tax (semi-weekly, monthly, or quarterly) and then reported quarterly on the VT-WH436. The total contribution rate is 0.44% of employee wages. 

  • Employers with one or more employees are subject to the childcare tax.
  • Employers may split the cost with employees
    • Employers must pay a minimum of 75% of the 0.44% contribution rate
    • Employees can contribute a maximum of 25% (i.e., 0.11%) of the 0.44% contribution rate.

Note: Employers may withhold up to 25% from employees or pay the entire Child Care Contribution tax. Employers are not required to withhold the same amount from every employee.

How can I edit the VT CCC Tax Policy in QuickBooks Online Payroll?

QuickBooks set up a default policy comprised of 100% employer contribution (.44%) to ensure your business has a policy set up before the July start date. To edit the overall employer/employee rate share we assigned your business and employees, follow the instructions outlined in our help article. Follow each step in the article and select the rate share based on the options outlined by the agency (either pay the full .44% as the currently set up, or have your employees contribute up to 25% of the total .44% rate (.11% of the overall contribution rate)

 

 

 

May 2024

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Instructions for activating or turning off auto tax payment feature

This update is intended for QuickBooks Online Payroll customers who received an in-product notification directing them to this blog post. If you received an in-product notification linking you here, please review the following critical update about your automatic payroll payment and filing service:

Your business chose the option for QuickBooks Online Payroll to pay and file your payroll taxes automatically on your behalf, but you have not completed the enrollment process to activate the auto pay and file feature.** 

If you want QuickBooks to file and pay your payroll taxes automatically for you, please complete the tax setup enrollment process for your federal taxes by July 1, 2024.  If you do not complete tax setup by then, starting in July, you will be responsible for filing and paying payroll taxes on your own, according to the applicable deadlines.

How do I complete the payroll tax setup for my business?

To complete your tax setup, complete each action item in the tax setup menu. 

You must resolve the open action items in the tax setup menu by July 1, 2024, or we will no longer be able to keep filing your payroll tax forms or begin paying your payroll taxes automatically after this date. While we will still send payment and filing reminders, you won't be able to take advantage of QuickBooks handling these payments and filings on your behalf automatically, and you will be responsible for filing and paying any payroll tax liabilities due in July and thereafter until you re-enroll in automatic payroll tax services and complete your tax setup.

For more info on completing your electronic payroll tax service enrollment, or for instructions on turning off the auto tax feature if you want to pay and file on your own, visit our Help Article and review our Terms of Service.

If you have any questions or need assistance completing your tax setup, please contact support.

Money movement services are provided by Intuit Payments Inc., licensed as a Money Transmitter by the New York State Department of Financial Services.  For more information about Intuit Payments' money transmission licenses, please visit https://www.intuit.com/legal/licenses/payment-licenses/.

**Features

Automated tax payments and filings: Automated tax payments and filing available for state and federal taxes. Enrollment in e-services is required for tax payments and filings only. Automated tax payments and filings for local taxes available in QuickBooks Online Payroll Premium and Elite only. 

 

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Changes to online payroll withholding payments for Illinois

Effective May 20, 2024, QuickBooks has changed how we process electronic Illinois withholding tax payments. QuickBooks has implemented a change to ACH credit for processing these electronic payments.  Below, we have outlined what this change means for our Illinois customers who submit electronic withholding payments via QuickBooks.

What changes can I expect if my IL withholding payments are paid electronically in QuickBooks?

  • QuickBooks will now directly debit the employer's bank account (previously, the debit came from the IL Department of Revenue).  
  • Electronic payments will be debited two business days before the payment date.
  • 501 coupons will no longer be sent with electronic payments as they are not required for this type of e-payment submission.

For businesses that process their Illinois withholding payments outside of QuickBooks, we will continue to provide the 501 payment coupon. 

There are no changes to how the payments are submitted in QuickBooks (whether QuickBooks submits on your behalf or if you submit before the payment deadline). No action is required from your business if you received an in-product message sending you to this update.  We just want to ensure our Illinois businesses are not alarmed when they see the funds debited earlier and directly by QuickBooks.

 

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April 2024

 

Vermont Nonprofit Unemployment Changes

 

The Vermont General Assembly has introduced new unemployment insurance (UI) laws for nonprofit organizations. Effective July 1, 2024, Vermont will require all nonprofit organizations to participate in providing unemployment insurance coverage. Under this new legislation, nonprofits must report their wages quarterly, keep track of new hires, and pay for any eligible unemployment claims that result from employee separations.

Nonprofits have two choices when it comes to participating in Vermont's unemployment insurance system:  

  • Taxable Entities: Nonprofits choosing this option will be assigned a 1% tax rate as a "new employer," effective July 1, 2024.
  • Reimbursable Employers: Nonprofits choosing this option will not pay State or Federal unemployment taxes and are exempt from quarterly state contributions/taxes. However, they must fully repay the State for any eligible unemployment claims paid related to individuals previously employed by their organization during the employee's "base period," which is roughly the 18 months prior to their claim.

How do I update my Vermont Unemployment Selections in QuickBooks?

If you are a nonprofit and need to update your Vermont Unemployment rate effective July 1, 2024, or remove exemptions in QuickBooks, follow our help article to add the 1% rate effective 07/01/2024. 

If you have marked your employees exempt, you will need to uncheck their exempt status by reversing the steps to exempt employees as outlined in our help article. Don't remove the employee exemption status until after you run your last second-quarter payroll (the second quarter ends June 30, 2024). The article also walks your business through the steps needed to be treated as a "reimbursable" employer if your business chooses that option.

We will communicate to Vermont employers again in June, reminding nonprofits to update their Vermont unemployment rates and exemptions. If you are a Vermont nonprofit, we recommend adding a reminder to take this action after running your final payroll in June.

For more information on this agency compliance change, visit the agency website.. 

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March 2024

 

Vermont Child Care Contribution Tax

Starting July 1, 2024, the Vermont Department of Taxes will implement and administer a new Child Care Contribution tax, composed of a payroll tax on wages and self-employment income tax. The Vermont Department of Taxes has issued guidance here. 

Key Provisions:

All employers required to remit Vermont Income Tax Withholding are subject to the Childcare Contribution tax. Employers are required to remit this tax for all employee wages for which they are required to pay Vermont Income Tax Withholding. The Childcare Contribution tax will be paid on the same schedule as your Vermont income tax (semi-weekly, monthly, or quarterly) and then reported quarterly on the VT-WH436. The contribution rate is set at 0.44% of employee wages.

  • Employers with one or more employees are subject to the childcare tax.
  • Employers may split the cost with employees
    • Employers must pay a minimum of 75% of the 0.44% contribution rate.
    • Employees can contribute a maximum of 25% (i.e 0.11%) of the 0.44% contribution rate.

Note: Employers may withhold up to 25% or pay the entire Child Care Contribution tax. Employers are not required to withhold the same amount from every employee.

How will QuickBooks support this new Child Care Contribution Tax?

QuickBooks is actively incorporating the new Child Care Contribution tax into our Online and Desktop Payroll platforms. We anticipate launching the feature to set up and track this new tax in May. Once this feature is available in your QuickBooks Payroll account, we will promptly notify your business.

Be on the lookout for our follow-up communications in May, when we will provide your business with the steps for setting up QuickBooks.

 

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Maine's New Mandated Retirement Program

Maine has a new state-mandated retirement plan, MERIT (Maine Retirement Investment Trust), to provide additional retirement plan options for Maine employees. While you likely received information about MERIT from the agency, we want to inform you of the details of the program and the steps to set up and track the deductions in QuickBooks.

The MERIT program applies to all employers that have been in business for at least 2 years, have 5 or more employees, and don't offer a separate qualified plan. Employers meeting these requirements must automatically enroll employees in the plan and register on the agency site. Employers can opt out of the MERIT program if they offer qualified employer-sponsored retirement plans.

What action should my business take?

  • Employers with 15 or more employees must register their business on the agency site by April 30, 2024, 
  • Employers with 5-14 employees must register by June 30, 2024. 

To register your business or apply for an exemption if you already provide your employees with a qualified retirement plan, visit the agency website.

What action will my employees need to take?

Once you’ve completed the registration, your employees will receive information directly from the MERIT program and can choose to stay automatically enrolled in MERIT or opt-out; they have 30 days to decide after you add them to the program. If they stay enrolled, the payroll deductions that they elect and that you set up for them in your employer portal will start as soon as your next payroll. If they opt out, they will be removed automatically from the program and can rejoin later.

How do I set up and track the payroll deductions in QuickBooks?

Once your registration is complete and you have entered all your employee information, you can set up and deduct the retirement contributions from your employee's paychecks. QuickBooks allows you to deduct these contributions and review contribution totals via a custom report. To set up and track your MERIT contributions, visit our detailed help article.

For additional information on the MERIT program, review the agency FAQs.

 

 

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SC, WA and WV Occupational Code Requirement

Effective for the 1st quarter of 2024, three states now require employers to report Standard Occupational Codes (SOC) for employees on the quarterly tax filing due in April. Standard Occupational Codes classify workers into occupational categories to collect, calculate, or disseminate data. Per our previous communications, you must assign the appropriate SOC code to any South Carolina, Washington, or West Virginia employee in QuickBooks Payroll. If you received an in-product notification pointing you to this blog, we have identified one or more of your employees who still need to have their occupational codes setup in payroll.

Add your occupational codes by March 17 or Payroll/Auto-Payroll will be blocked

Add the codes to your employee's profile in QuickBooks ASAP. If the codes are not entered by March 17, you will be blocked from running payroll until they are entered. If your business utilizes Auto-Payroll, it will not run if the codes are not entered in time. A payroll blocker is necessary to keep you compliant, as state agencies will only accept your quarterly unemployment filing if the codes are present. For West Virginia employees, make sure you enter the code, job title, and county! 

Our detailed SOC article provides step-by-step instructions for setting up the codes in payroll. 

Enter the codes by March 17 to ensure no disruptions to your payroll and avoid issues with unemployment returns being rejected.

 

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January 2024

 

North Carolina Due Date Extension: 4th Quarter, 2024

North Carolina is experiencing delays in processing the Unemployment Insurance Tax and Wage report and payments for the 4th quarter of 2023. The agency has extended the filing due date from January 31, 2024, to February 29, 2024. The updated fourth-quarter due date can be seen directly on the North Carolina homepage.

If QuickBooks files and pays taxes on your behalf, the payment and filing will be completed by the extended due date. We will submit the payment and filing by January 29, but you may not receive confirmation that they were successful until February 29. Your business will not be penalized as long as it is completed by February 29. No action is required from your business; we are just updating you on the delay in completing the third quarter filing.

If you manage submitting payments and filings in QuickBooks, we recommend completing the payment and filing by January 31. The due date in the system will continue to reflect January 31 (or January 29 to submit electronically) in QuickBooks Online Payroll. You can submit after January 31, though, as the agency will only penalize payments and filing received after February 29.

 

 

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Washington Paid Family Leave Rate Update 2024

Effective January 1, 2024, the overall combined Washington Paid Family Leave rate has decreased from .80% to .74%. Employers will pay 28.57% of the total premium, and employees will pay 71.43%, a ratio similar to 2023. You are only required to pay the employer share if you have 50 or more employees.

QuickBooks Online Payroll has updated the overall combined rate, and you now need to apply your rate for 2024. Even if you keep the total employee vs employer rate share the same for 2024, reapplying your Washington Paid Leave rate with an effective date of January 1, 2024, is required to calculate the tax accurately for tax year 2024. 

What action does my business need to take?

Follow the instructions in our community article to update your rate in QuickBooks Online Payroll with an effective date of January 1, 2024. The article provides detailed steps for applying your rate and links to the agency website for additional information.

 

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South Carolina Standard Occupation Codes Required for 2024

Effective for the 1st quarter of 2024, the South Carolina Department of Employment and Workforce will require employers to report Standard Occupation Codes (SOC) for employees on the quarterly tax filing due in April. Standard Occupation Codes classify workers into occupational categories to collect, calculate, or disseminate data. You must assign the appropriate code to each employee in your payroll account. The ability to add the codes in QuickBooks Payroll is now available, and you should begin adding them to your employees as soon as possible.

What action does my business need to take?

You must add the codes to each South Carolina employee profile in your payroll account by March 31, 2024, at the latest! If the codes are not entered by sometime in late February, online payroll businesses will be blocked from running payroll until they are entered. Our detailed SOC article provides step-by-step instructions for setting them up in payroll. Visit the agency website for additional information on South Carolina Standard Occupation Codes. We hope this communication offers your business all the information you need to get ahead of this new agency requirement.

 

 

 

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Rhode Island Temporary Disability Insurance Rate Change 2024

Effective January 1, 2024, the Rhode Island Temporary Disability Insurance (TDI) rate has increased from 1.1% to 1.2%. In QuickBooks Online Payroll, this tax is calculated automatically (the rate is not entered manually by employers like State Unemployment Insurance.) Currently, QuickBooks is still calculating at the 2023 1.1% tax rate. We are working on adding the new 1.2% rate to our product as soon as possible. Once the tax rate is updated, we will create an adjustment to capture the .1% not calculated on any 2024 checks for Rhode Island employees. Then, that amount will automatically be deducted from your employee's next paycheck.

Is there any action my business needs to take?

Advise your employees that they are being slightly under-withheld from Rhode Island TDI tax and that it will automatically catch up on a future paycheck. We will notify all Rhode Island employers once we apply the updated rate in QuickBooks. You can then advise your employees to expect a slight TDI tax increase on their next check to catch up on the .1% missed on any previous 2024 paychecks.

We apologize for any inconvenience this may have caused. When we update the tax rate and complete the paycheck adjustments, we will communicate with all Rhode Island QuickBooks Online payroll employers.

 

 

 

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December 2023

 

Georgia Administrative Assessment Update

 

Effective January 1, 2024, the Georgia Department of Labor reintroduced the Administrative Assessment Fund tax with a rate of .06%. This tax, which is paid along with the Georgia Unemployment tax, had a rate of 0.0% in 2023.  

How do I set up the updated 2024 Georgia Admin rate in payroll?

 

For QuickBooks Online Payroll customers:

We will automatically apply the 2024 rate of .06% to your account if you pay Georgia Unemployment tax. You do not need to take any action in your QuickBooks Online Payroll account (but remember to add your overall GA unemployment rate!)

 

For QuickBooks Desktop Payroll customers:

Add the Georgia Administrative Assessment Fund rate when updating your overall 2024 GA unemployment rates. To update the rate in QuickBooks Desktop Payroll, visit our help article.

While the agency hasn’t updated its site with the new rate yet, it will likely be posted on the Georgia Department of Labor website in early January.

 

 

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Iowa Withholding and W-4 Changes for 2024

On Wednesday, December 13, 2023, The Iowa Department of Revenue issued updated income tax withholding formulas and tables for tax year 2024. As part of the changes, the Iowa W-4 has been revised to accommodate changes in the withholding formulas and tables. Allowances on the W-4 will now be expressed as a dollar value instead of a number, as the instructions indicate on the updated form.

QuickBooks is reviewing the withholding tables and formula changes and will likely have the updated tables applied later in January 2024. In the meantime, we recommend that Iowa employers begin having their employees fill out updated versions of the Iowa W-4. View updated IA W-4.

We will communicate to all our Iowa Payroll customers in early 2024 when changes to the withholding tables and tax formula are complete. Employers can view the Iowa 2024 withholding formulas and tables online.

 

 

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Changes to Montana MW4 and Withholding Calculations

Beginning in Tax Year 2024, taxpayers will see changes to filing statuses, tax brackets, and the calculation of Montana taxable income. The Montana Department of Revenue has updated its withholding tax tables and the employee’s withholding and exemption certificate (Form MW-4). Beginning January 1, 2024, the highest marginal tax rate will decrease from 6.75% to 5.9%. Tax rates will now be based on the filing status the taxpayer uses on the federal income tax return (Form 1040).

Additional information on 2024 changes

The change to the method for calculating Montana wage withholding will be similar to the federal method. Employees will no longer use Montana allowances, such as Montana personal and dependent exemptions and the Montana standard or itemized deductions, to calculate the amount of their Montana wage withholding. Instead, the new calculation method will rely on the federal standard deduction amount for the employee’s federal filing status. Employees can still designate additional amounts to withhold from their paycheck or elect to have an amount they choose withheld from their paycheck. Specific exemptions to Montana wage withholding will not change.

What action does my business need to take?

The department requests all employees working in Montana to submit a new Form MW-4 for Tax Year 2024 to adjust the amount of wage withholding to more accurately reflect the employee’s Montana tax liability. View the updated MT MW-4.
QuickBooks is updating our system to match the changes to the filing statuses and withholding tax calculations. We will update your business with additional information when these changes are added in early 2024.

 

 

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Illinois Paid Leave for All Workers Act

Governor Pritzker signed SB0208, which will provide paid leave for employees within the state of Illinois. The Act will require most Illinois employers to provide eligible employees with up to 40 hours of paid leave per 12-month benefit period to be used for any reason. The Act will become effective on January 1, 2024. 

How does it work?

Eligible employees are to earn 1 hour of paid time off per 40 hours worked. Employers can front load 40 hours of paid time off or set it up to accrue at a rate of 1 hour of paid time off per 40 hours worked. All employees working for an Illinois employer are eligible, outside of independent contractors and construction employees covered by collective bargaining agreements.

Employees can take time off that they have earned starting March 31, 2024, or 90 days after they are hired. Employees can take time off for any reason, including vacation, childcare, medical appointments, and sick leave. Employers cannot require employees to find their replacement when they take their earned leave time.

How do I track IL Paid Time Off in QuickBooks?

To set up and track Illinois Paid Leave in QuickBooks Payroll, follow the instructions outlined in our detailed help article.

Additional Information

For more information on Illinois paid time off, check out the FAQ section on the agency's website.

 

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November 2023

 

Minnesota's 2024 Earned Sick and Safe Time Policy

Effective Jan. 1, 2024, Minnesota's earned sick and safe time law requires employers to provide paid leave to employees who work in the state. Minnesota's current sick and safe leave law remains in effect until Dec. 31, 2023, and will be replaced by the new earned sick and safe time law on Jan. 1, 2024.  

Under the new law, employees will earn one hour of sick and safe time for every 30 hours worked. They can earn a maximum of 48 hours each year unless the employer agrees to a higher amount. To be eligible for sick and safe time, employees must work at least 80 hours a year for an employer in Minnesota and not be an independent contractor.

How do I set up, track, and edit time office policies in QuickBooks?

Before setting up or adjusting your time off plans in QuickBooks, visit the agency website for detailed information on the new policy and answers to FAQs. Visit the agency website.

The only change you need to handle in QuickBooks is ensuring you have paid time off policies that match the agency's minimum requirements. To add or update your sick or paid time off policies for 2024 in QuickBooks, follow the detailed steps outlined in our help article.

 

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California Sick Leave Requirements 2024

California recently expanded the Paid Sick Leave (PSL) guaranteed to workers, which will take effect on January 1, 2024. Governor Gavin Newsom signed SB 616, which guarantees employees five paid sick days per year, up from three days previously. An employee can take paid sick leave if the employee has worked in California for the same employer for 30 or more days in a given year since being hired.

Accrued paid sick days must  carry over to the following year of employment. However, an employer may limit an employee’s use of accrued paid sick days to 40 hours or 5 days in each year of employment, calendar year, or 12-month period. No accrual or carryover is required if the full amount of leave is received at the beginning of each year of employment, calendar year, or 12-month period. The term “full amount of leave” means 5 days to 40 hours.

Employers must notify all employees who are covered in writing of the availability of paid sick leave upon hire. 

Update your sick pay policies for 2024 in QuickBooks to provide at least 40 hours of sick pay per the agency’s new requirements. To set up, track or edit paid time off policies in QuickBooks, follow the steps in our help article.

 

 

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October 2023

 

Alabama Overtime Withholding Exemption

Alabama has enacted a new overtime rule for hourly employees by passing House Bill 217. Effective January 1, 2024, overtime pay received by full-time hourly employees will be excluded from being counted as taxable income for Alabama state withholding tax. This new overtime exemption for hourly employees will last through June 30, 2025. 

Employers must provide a one-time report that includes the total amount of overtime paid during 2023 and the number of full-time hourly employees who received the pay. This initial report is due January 31, 2024. QuickBooks will automatically complete the one-time report on behalf of QuickBooks Desktop Assisted and Online Payroll customers. Desktop DIY customers will need to submit the report when completing their annual Alabama A-3 tax form. A link will be available that will route you to enter this required data manually.

A Monthly/Quarterly report with the same data requirements will begin in the 2024 tax year. Employers must report the overtime on either the Monthly Form A-6 or the Quarterly Form A-1. 

How will QuickBooks support these new requirements?

The ability to set up and track exempt overtime wages for hourly employees in now available in both our Desktop and Online payroll products. We have added detailed instructions to assist our Alabama payroll customers in our help article. The article will walk you though exempting overtime wages from Alabama withholding tax, provide helpful examples, and answer general questions about this new agency requirement.

Additional details on this agency change are available on the Alabama Department of Revenue website. Visit the AL DOR site

 

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September 2023

New I9 Form being released on Oct 16 for some Online Payroll customers

This blog post only impacts customers who received an email and in product notification about upcoming changes to form I-9.

We are reaching out to provide an important update regarding the United States Citizenship and Immigration Services (“USCIS”) Form I-9, Employment Eligibility Verification.

USCIS has published a new version of Form I-9 and Instructions along with a summary of changes to the Form I-9. We are updating our product workflows, messaging, and generated forms to reflect the changes in the new form.  

USCIS has determined that businesses can continue to use the current version until October 31, 2023 and must start using the new form on  November 1, 2023. After that, employers who don’t use the new form may be subject to penalties. 

What happens next?

In an effort to update our product workflows, we will remove the current version of the form and release the new version of the form on October 16, 2023. 

Between October 10, 2023, and October 15, 2023, you will not be able to begin new I-9 forms in QuickBooks Payroll while we switch to the new form, but can finish pending forms. During this time, you will need to print and manually complete forms that were not previously started.

The updated version of form I-9 will be available in QuickBooks Payroll on October 16, 2023, which you can use for any newly hired employees.

What if I have an incomplete I-9 or need to fill out a new I-9 soon?

If you, or your employees, have started filling out the old form within QuickBooks, you will need to complete it by October 15, 2023. After this date, you must print and manually complete any forms, as our system will no longer support online completion of the old version of the form. Our support team can provide information regarding the status of forms that were initiated prior to October 10, 2023.

We understand that this change may cause some inconvenience, and we appreciate your understanding as we work to implement these necessary updates. Our QuickBooks support team is here to assist you. Contact support

 

 

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NY Metropolitan Commuter Tax Update

New York Governor Kathy Hochul approved Senate Bill 4008, which, effective July 1, 2023, increases the top rate for the Metropolitan Transportation Mobility Tax (MCTMT) from 0.34% to 0.60% for employers and individuals in certain New York counties. In addition, the agency has now created two separate zones for wage tracking at reporting.  As a result, your business may now have two different tax rates for this tax.

How do I add my rate(s) in QuickBooks Online Payroll?

Effective 9/30/2023, the ability to add rates in multiple zones will be live in the QuickBooks Online Payroll product. Please visit the agency website  to validate your 3rd quarter tax rate(s) and to learn more about the NY Metro tax. After validating your tax rate(s) for the 3rd quarter, you can update it in QuickBooks Online by following the instructions outlined in our help article. Once you apply the rate, the system will automatically correct the total Q3 tax amount due. Learn how

Payroll will be blocked from running if you don't update your rate(s)!

Auto payroll will be blocked from running until your rate(s) are added for MCTMT zones that require a tax rate.  Regular payroll will be blocked as well, until the rate(s) are applied. Immediately add your Q3 MCTMT rate(s) into payroll to avoid any interruption in payroll services. If you don’t have employee’s working in these zones, your payroll will not be blocked.

If QuickBooks automatically submits your filings and payments, make sure you update your tax rate by October 9. Businesses that manage submitting payments and filings must update the rate before completing the third quarter payment and filing due October 31, 2023.

 

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August 2023

NY Metropolitan Commuter Tax Form Changes

Effective September 1, 2023, QuickBooks Online Payroll will remove the ability to file the New York Metropolitan Commuter Tax form (MTA-305) for previous tax quarters. The agency is changing to a new version of the form for tax quarters beginning on or after July 1, 2023, which QuickBooks will support. No action is required from your business unless you have a past-due NY MTA-305, which you still need to file.

What if I have a past-due NY MTA-305 form that I still need to file?

If your business has not filed the NY MTA-305 for prior tax quarters, complete the past-due form(s) in QuickBooks Online Payroll before September 1, 2023. After September 1, the old form will no longer be available in the product, and you cannot file for previous tax quarters using the new version of the NY MTA-305. After September 1, if you still need to file a NY MTA-305 form for a prior tax quarter, you can complete it on the agency site. View agency forms

We will contact your business as soon as the changes to the rates and form for the third quarter become available in QuickBooks Online Payroll. To learn more about the recent changes to the NY Metropolitan tax, visit the agency website. Learn more

 

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July 2023

Florida E-Verify Requirement Effective July 1, 2023

Starting July 1, 2023, Florida now requires that employers verify their new employee’s employment eligibility using E-Verify in addition to the Federal Form I-9. This new requirement applies only to employers where the new employee will be the 25th or greater employee performing services in Florida at the time of the new employee’s employment verification. Employers with fewer than 25 employees must continue to verify employment eligibility using Federal Form I-9 within three days of starting work for the new employer.

What is E-Verify?

E-Verify is an electronic employment eligibility verification system administered by the U.S. Citizenship and Immigration Services. It lets employers verify the employment eligibility of new employees by comparing information against government databases. To enroll in the E-verify program or log in, visit the E-verify homepage.

Will QuickBooks support E-verify in payroll products?

As a payroll agent, QuickBooks does not have authority to certify the use of the E-Verify system on behalf of an employer. QuickBooks will continue to support the quarterly Form UCT-6, but employers will separately certify using E-Verify by filing the Employer E-Verify Certification form.  QuickBooks is investigating the possibility of enhancing the product to provide reminders about the E-Verify requirement.

When do I need to complete the E-Verify certificate?

The E-verify certification must be completed on your first report filed in a calendar year. So for any employer who has already completed a 2023 tax return and now hires an employee and uses the E-Verify system, you must complete your E-Verify certificate in January of 2024.

For more information on the certification process, employee eligibility, and more, we highly recommend reviewing the agency faq's.

 

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Washington Lump Sump Child Support Reporting Requirement July, 2023

Starting in July 2023, Washington requires employers to report lump sum payments paid to employees with past due child support garnishment orders. Employers must report all lump sum payments of more than $500 after applying mandatory tax and child support deductions. We're here to walk you through this new requirement if you have an employee with a past-due child support garnishment order.

A lump sum payment includes but is not limited to:

  • Bonuses 
  • Commissions
  • Retroactive pay increases
  • Severance
  • Sign on bonus
  • Vacation holiday cash-out options

When do businesses need to report the lump sum payments?

Employers should report the lump sum payment as close to the payment date as possible. The Division of Child Support will respond within 14 days and provide guidance on how much to withhold from the lump sum payment. Employers that do not receive a response before the payment date must garnish and hold 50% of the payment until the Division of Child Support responds.

If your business pays an employee a lump sum payment to an employee who owes child support, report it via the agency reporting portal. You must include your name as the employer, your contact information, the employee name, the amount of the lump sum payment, and the expected payout date. 

Visit the lump sum payment reporting site.

For more information on this new requirement, visit the Washington Division of Child Support homepage. 

Visit the WA Child Support site. 

For information on setting up and tracking garnishments in QuickBooks Payroll, follow the steps outlined in our help article.

Learn more about garnishments in QuickBooks

 

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Remote I-9 verification changes and form update

During the COVID-19 pandemic, the U.S. Immigration and Customs Enforcement (ICE) introduced a temporary policy allowing employers to inspect and verify the Employee Eligibility Verification Form I-9 remotely. If employees were hired on or after April 1, 2021, and worked exclusively in a remote setting due to COVID-19-related precautions, they were temporarily exempt from the physical inspection of the Employment Eligibility Verification Form I-9. This temporary policy will end on July 31, 2023. A new policy has been enacted beginning on August 1, 2023.

What do I need to do if I remotely verified an I-9 Form before July 31, 2023?

Employers that remotely inspected a Form I-9 must now review the document in person and update the Form I-9 as follows:

  • Add "document physically examined" to the additional information area in Section 2 of the form by August 30. 
  • Make sure to include the date the document was physically examined.
  • After updating Form I-9, you can scan and upload the updated document into QuickBooks by following the steps in our help article.Learn how

After July 31, Form I-9 can no longer be verified remotely using this process. If your business previously verified any Form I-9s remotely utilizing this temporary policy, stay compliant and physically examine and update them by August 30. For additional information on this policy change, please visit the ICE website. 

How can I remotely verify an I-9 form starting August 1, 2023?

On August 1, 2023, U.S. Citizenship and Immigration Services will publish a revised version of Form I-9. Employers that would like to remotely verify I-9 forms starting August 1, 2023, and after must follow the new policy enacted by the U.S. Immigration and Customs Enforcement (ICE) and use the latest version of form I-9. To remotely verify an I-9 starting August 1, 2023, complete the following steps:

  1. Enroll in E-verify
  2. Remotely inspect your employee's I-9 via live video conference.
  3. Use the newest version of the form I-9. View Form I-9
  4. Check the box for "Additional Information" on the form I-9
  5. Create a case in E-verify  After remotely verifying Form I-9, you can scan and upload the updated document into QuickBooks by following the steps in our help article. Learn how

QuickBooks Payroll will have the updated I-9 form available in the product before the October 31, 2023, deadline. For additional information and detailed instructions on the new remote verification process, visit the ICE website. Learn more

 

 

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June 2023

Washington Cares Fund Tax Effective July 1, 2023

The Washington State Legislature established a long-term care insurance benefit for all eligible workers to address long-term needs. Effective July 1, 2023, employers must start collecting employee premiums for the new Long-Term Services and Supports Trust Program, known as WA Cares Fund, which will help provide long-term care insurance to employees in Washington.

What action does my business need to take?

This long-term care benefit became active in QuickBooks Online Payroll on July 1st and all Washington employers are set to the standard .58% employee deduction. Unless you have exempt employees or are choosing to pay the tax on your employees' behalf, there's nothing you need to do for now! If your company is exempt or has exempt employees, or if you would like to pay the premium on your employee's behalf, follow the instructions for changing the rate in payroll via our help article. 

What if I created July paychecks before QuickBooks assigned the rate?

  • If you created paychecks dated after July 1 before QuickBooks applied the rate in payroll, we will catch up on the quarterly tax later in July.
  • If you change your employees to exempt or choose to pay the tax as the employer after already having July checks, we will also correct the quarter-to-date tax calculations later in July.
  • QuickBooks will contact all applicable employers with additional information when we update quarter-to-date tax totals later in July.

Should I notify my employees about the new tax?

If you have not notified your employees of the upcoming tax, we recommend doing so immediately. The Washington Care Fund agency has put together a paycheck insert with helpful information you can provide your employees.

Additional information from the agency

If you have any additional questions about the WA Care Fund program, we recommend 

visiting the agency FAQ section to learn more.

 

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New York Metro Tax Rate Update July 1, 2023

New York Governor Kathy Hochul recently approved Senate Bill 4008, which, effective July 1, 2023, increased the top rate for the Metropolitan Transportation Mobility Tax (MCTMT) from 0.34% to 0.60% for employers in certain New York counties. MCTMT tax calculations are now also divided into two zones which means your business may have more than one rate depending on your total expected payroll expense and if you have employees working in multiple zones as outlined below:

  • Zone 1 includes the counties of New York (Manhattan), Bronx, Kings (Brooklyn), Queens, and Richmond (Staten Island).
  • Zone 2 includes the counties of Rockland, Nassau, Suffolk, Orange, Putnam, Dutchess, and Westchester.

As a result of this tax change, New York employers may now have multiple MCTMT tax rates during the same quarter, which is a significant change to how the tax was previously calculated. Currently, there is only the ability to enter one tax rate per quarter in QuickBooks.  The new higher rate of .60% is available in QuickBooks Online Payroll and will be available in Desktop Payroll on June 20. QuickBooks is investigating a solution to add the ability to support customers with multiple tax rates for Online and Desktop Payroll.

Please visit the agency website to validate your 3rd quarter tax rate(s) and to learn more about the NY Metro tax changes. QuickBooks will contact your business later in the 3rd quarter to provide a solution for applying rates and adjusting the 3rd quarter tax amounts if required. 

 

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May 2023

California ACH Credit Bank Account Change

The CA Employment Development Department (EDD) has announced that they are changing the primary bank account where ACH credit tax payments are sent to, effective 05/31/2023.  Your business may have received a notification from the EDD related to this change. If you submit tax payments electronically through QuickBooks Payroll, there is no action required for your business. QuickBooks Payroll will be updating the CA bank account that we transmit these tax payments to on our end.

This notification is just to make California employer's aware that QuickBooks is on top of this bank account change and that you do not need to take any action or update anything in payroll.

 

 

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Archive

April 2023

California ACH Credit Bank Account Change

The CA Employment Development Department (EDD) has announced that they are changing the primary bank account where ACH credit tax payments are sent to, effective 05/31/2023.  Your business may have received a notification from the EDD related to this change. If you submit tax payments electronically through QuickBooks Payroll, there is no action required for your business. QuickBooks Payroll will be updating the CA bank account that we transmit these tax payments to on our end.

This notification is just to make California employer's aware that QuickBooks is on top of this bank account change and that you do not need to take any action or update anything in payroll.

 

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Set up your Colorado Paid Family Leave Policy in QuickBooks Payroll

If you received an in-product alert or an email on April 4th related to this issue, you still need to set up a Colorado Paid Family Leave policy in payroll for your employees. As a reminder, no Colorado businesses will be fully exempt from withholding and reporting premiums until 2024. Additional information on exemptions is on the agency's private plan guidance homepage.

Effective Wednesday April 5, you will not be able to run payroll until the policy is set up. We want to make sure you comply with the new program! To set up the plan in QuickBooks, please follow the instructions in our detailed help article. Make sure to set the effective date as 01/01/2023. After assigning the policy to employees with a 01/01/2023 effective date, the system will automatically adjust the year-to-date tax calculation. 

Since you did not originally withhold the tax from your employees, the Colorado Department of Family Leave has advised QuickBooks that you cannot catch up on the missed amounts of future checks.  As a result, you must choose the option in QuickBooks to pay 100% of the tax as the employer when setting up the policy.

The Colorado Paid Family Leave tax payment and filing are due on April 30, 2023, so it is critical that you set up the policy immediately. We will keep the payment and filing blocked from being submitted until at least April 10, allowing your business some time to add the policy for your business and employees.

More information and FAQs on the Colorado Paid Family Leave program are available on the agency website.

 

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Set up your Oregon Paid Family Leave Policy in QuickBooks Payroll

If you received an in-product alert or an email on April 4th related to this issue, , you still need to set up an Oregon Paid Family Leave policy in payroll for your employees. All Oregon employers who don't have their own state-approved paid leave program are required to collect premiums effective January 1, 2023. 

Effective Wednesday April 5, you will not be able to run payroll until the policy is set up and assigned to employees. We want to make sure you comply with the new program! To set up the plan or mark your company as exempt if you've received confirmation of exempt status from the state, please follow the instructions in our detailed help article. Make sure to set the effective date as 01/01/2023.  After assigning the policy to employees with a 01/01/2023 effective date, the system will automatically adjust the year-to-date tax calculation. 

The Oregon Paid Family Leave tax payment and filing are due on April 30, 2023. We will keep the payment and filing blocked from being submitted until at least April 10, allowing your business some time to add the policy for your business and employees. 

Please visit the agency website for more information on the Oregon Paid Family Leave program.

 

 

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QuickBooks Payroll Down for System Maintenance on Saturday, April 8

QuickBooks Online Payroll will be temporarily unavailable while we perform system maintenance on Saturday, April 8.  The system outage will be for just 2 hours, beginning at 9:00 PST

Please plan accordingly for this payroll system downtime.  We appreciate your patience during this time frame!

 

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March 2023

Bank Closure Information

The following information on recent bank closures is for both QuickBooks Online Payroll and QuickBooks Desktop Payroll customers. We understand that your bank’s closure is an unexpected occurrence and our goal is to help you during this transition as best as possible.

The situation with bank closures is changing rapidly, and QuickBooks is tracking the latest developments to support your business and keep you up to date on managing your payroll. For the latest information from QuickBooks regarding this situation, we will regularly post updates here to help keep you informed.

As a result of the recent bank closures, QuickBooks has new information for our payroll customers who use Silicon Valley Bank (SVB), Signature Bank (Signature) or any other financial institution that has closed down.

What should my next steps be as a QuickBooks Payroll Customer

  • If you have not taken any action with your QuickBooks Payroll account, no immediate action is required to process your payroll or payroll tax payments. We will keep you informed of any changes on this blog.
  • If you have already taken action, including updating your bank account or issuing paper checks, please continue to follow the instructions provided in the product to ensure your payroll and payroll tax payments are processed accordingly.
  • While the FDIC indicates you can still currently use and access your Silicon Valley Bank or Signature Bank bank account, this is expected to change in the near future, therefore, we still recommend you update your bank account in QuickBooks Payroll with another bank account from a different financial institution as soon as possible.

Silicon Valley Bank Customers update 4/5/23:

On March 26, the Federal Deposit Insurance Corporation ("FDIC") announced it was selling deposits and loans it took into receivership from Silicon Valley Bank ("SVB") to First-Citizens Bank & Trust Company ("FCB") as of March 27, 2023.
How does this recent announcement impact my business and my payroll account?
-If you have not taken any action with your QuickBooks Payroll account, no immediate action is required to continue to process your payroll or payroll tax payments.
-If you have already taken action, including updating your bank account or issuing paper checks as an alternative, please continue to follow the instructions provided in the product to ensure your payroll and payroll tax payments are processed accordingly.
The FDIC has clarified that you can currently still process payments and payroll from your former-SVB bank account linked to your QuickBooks Payroll at this time. You can continue to do so until FCB (the bank to which the FDIC sold SVB assets) sends you any additional instructions. We advise you to be on the lookout for any notices from FCB.

Signature Bank Customers: provided an update

The Federal Deposit Insurance Corporation (“FDIC”) announced that Signature Bank was closed by the New York State Department of Financial Services, which appointed the FDIC as receiver. As a result, Signature’s deposits and virtually all the bank’s assets were transferred to Signature Bridge Bank, N.A. The FDIC provided an update indicating Signature’s depositors should be able to access all their funds as of March 13.

Silvergate Bank Customers:

The California Department of Financial Protection and Innovation (DFPI) announced Silvergate Bank, a California state-chartered bank under the DFPI's supervision, has voluntarily begun the process of liquidation.

 

 

 

 

 

 

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Validate OR SUI Rate before filing for first quarter 2023

Effective for the first quarter tax filing due in April 2023, the state of Oregon will reject Oregon OQ tax filings with an incorrect State Unemployment Insurance (SUI) tax rate. The agency has implemented a new filing rejection if the tax rate on the return differs from the expected rate. If your Oregon OQ tax filing rejects for this reason, you will be responsible for completing an updated filing.  It is always essential to have your SUI rate to make sure your business pays the accurate tax due to the agency, but now there's an additional reason to make sure you validate your rate!

What action should my business take?

To avoid rejections, verify your SUI tax rate before the end of the quarter and then update it in payroll if the rate is incorrect. For steps on validating and updating your SUI rate in payroll, please visit our help article on updating SUI rates. Please ensure your rate is updated and accurate before the end of the tax quarter on 3/31/2023. 

If your tax rate is correct, there is nothing your business needs to do.

 

 

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February 2023

Oregon OQ Tax Filing Update for 3rd and 4th Quarter 2022

QuickBooks recently became aware of an issue related to electronically filed Oregon OQ tax filings for the third and fourth quarters of 2022. QuickBooks misreported the subject unemployment insurance wages for some employees, so the total wages did not reconcile on the filing. As a result, many filings for these quarters were not accepted by the agency, despite an email from QuickBooks stating they were. This issue did not affect any Oregon tax payments sent.

To make sure businesses are not negatively affected by this issue, QuickBooks is completing the following action:

  • We are fixing the employee wage reporting problem, so this issue is no longer present on electronically filed Oregon OQ tax forms.
  • The third and fourth-quarter tax filings impacted will be re-transmitted to the agency by QuickBooks.
  • We are investigating any potential penalties and interest related to this issue with our agency partners.
  • If penalties are assessed, QuickBooks will reach out to your business again to provide a resolution to the notices.
  • All employers affected by this issue will be notified by email on Tuesday 2/21.

Employers can review the status of their filings online at the agency website. If 3rd or 4th quarter filings are not currently posted, they will be as soon as QuickBooks completes the above action.

Please give us feedback about the payroll compliance content we're providing you!

 

 

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Mississippi Unemployment Tax Notice Issue

Some QuickBooks Online Payroll employers have contacted customer support about tax notices from the Mississippi Department of Employment Security advising that their 4th quarter UI-3 wage report had not yet been received.  The notices did not reflect any penalties and interest assessed.

  • QuickBooks is aware of this issue and we have reached out to our agency partners on this issue.
  • While the unemployment payments posted successfully, the agency has yet to upload the wage filings that were received on time.
  • No action is required from customers who received this specific notice and paid their 4th quarter MS unemployment taxes by the due date. 
  • QuickBooks will continue to work with the agency to ensure these specific filings are posted as received on time.
  • Any customer impacted by this issue will receive an email explaining the issue by 2/9/2023.

 

 

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Colorado State Mandated Retirement Program

Colorado has implemented a state-mandated retirement program titled "Colorado Secure Savings." The program was designed to provide retirement savings options for the 940,00 Colorado employees who are without a traditional retirement program provided by their employers.

How the CO program works:

  • The program uses after-tax payroll deductions to a Roth IRA, which grow tax free. 
  • If your employees don't opt out you'll deduct a certain percentage from their paychecks.
  • Once your employees are entered into the system, update your payroll payroll processing to include employee contributions, which are seamlessly deposited into each employee's account.

Registration:

Colorado will reach out to your business when it's time for you to register.  Registration deadlines will vary depending on the total amount of employees your business has.

  • Employers with 50 or more employees must register by March 14, 2023.
  • Employers with 15-49 employees must register by May 15, 2023.
  • Employers with 5-14 employees must register by June 30, 2023.

Exemption Process:

If your business already provides a traditional retirement program, begin the exemption process on the agency website.

How do I track the deductions in QuickBooks Online Payroll?

To set up and track the payroll deductions in QuickBooks Online Payroll, please visit our step-by-step help article.

Additional Information:

Please visit the Colorado Secure Savings homepage for additional information and answers to frequently asked questions.

 

 

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January 2023

North Carolina Unemployment Filings Rejected in Error Resolution

QuickBooks was recently made aware of an issue in which we erroneously rejected your 4th quarter 2022 North Carolina Unemployment Insurance tax filing. The agency accepted the tax filing, but the filing was then incorrectly marked as rejected by QuickBooks. After marking the filing as rejected, we added a To-Do reminder on the Overview tab advising that you needed to resolve the rejected filing.

  • QuickBooks has now updated the filing status to accepted and will remove the To-Do reminder on the Overview tab.
  • If you re-filed the form, you might receive an email rejection notice for a duplicate submission. Since your original submission was accepted, you can ignore a rejection email for a duplicate tax filing.

 

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Washington Paid Family Leave Rate Issue

Effective January 1, 2023, the Washington Paid Family Leave premium rate has changed from .6% of employee gross wages to .8%. Of this, employers with 50 plus employees will pay up to 27.24%, and employees will pay 72.76%. 

What is QuickBooks doing to resolve this issue?

  • QuickBooks has applied the new rate into payroll which was live by Saturday 1/14.
  • Your business should now update your tax rate in payroll, which will automatically correct the year-to-date tax calculations.
  • Any amounts over or under-withheld from your employees will automatically settle on their next paycheck after the rate is applied and the tax for 2023 adjusts. 
  • QuickBooks has discussed collecting the additional employee tax on future paychecks with our WA agency partners and confirmed it is acceptable to catch up the amount not originally withheld on 2023 paychecks.  Since the tax was calculated on the check (just not at the new higher rate which QuickBooks implemented late) collecting the additional funds for the slight rate change is acceptable.

For more information on the Washington Paid Family Leave rates, visit the agency website.

 

 

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Minimum/Maximum Allowable State Unemployment Insurance Rate Changes for 2023

Some businesses in AL, AZ, CT, DE, GA, HI, IL, MA, ME, MN, NC, OR, TX and VT could not update their 2023 State Unemployment Insurance (SUI) rates in QuickBooks Online Payroll. This is a result of their 2023 rates being larger or smaller than last year's available rates outlined by the state agencies.

What is QuickBooks doing to resolve this issue?

  • QuickBooks has updated the minimum/maximum allowable rate fields for AL, AZ, CT, GA, HI, MA, ME, MN, NC OR, TX, and VT.
  • Employers previously blocked from adding their 2023 tax rates can now update their rates.
  • After updating your tax rate in payroll, the system will automatically correct the overall 2023 year-to-date tax calculation.
  • Since this is an employer-only tax, this will not impact the pay your employees received.
  • QuickBooks expects to update the IL SUI minimum and maximum allowable rates by 2/4/2023. We are also working on updating the wage base for IL from $12,960 to $13,271 for 2023.  We will correct the taxable wages before the quarterly filing is due.  If your business is required to submit monthly filings, they are not impacted since they report total wages, not taxable wages.
  • The DE SUI minimum and maximum allowable rates that were recently announced will be available later in February. We will update this post when those rate fields are updated.

 

 

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Washington Paid Family Leave Rate Issue

Effective January 1, 2023, the Washington Paid Family Leave premium rate has changed from .6% of employee gross wages to .8%. Of this, employers with 50 plus employees will pay up to 27.24%, and employees will pay 72.76%. 

What is QuickBooks doing to resolve this issue?

  • QuickBooks has applied the new rate into payroll which was live by Saturday 1/14.
  • Your business should update your rate in payroll which will automatically correct the year-to-date tax calculations.
  • Any amounts over or under-withheld from your employees will automatically settle on their next paycheck after the rate is applied and the tax for 2023 adjusts. 
  • QuickBooks has discussed collecting the additional employee tax on future paychecks with our WA agency partners and confirmed it is acceptable to catch up the amount not originally withheld on 2023 paychecks.  Since the tax was calculated on the check (just not at the new higher rate which QuickBooks implemented late) collecting the additional funds for the slight rate change is acceptable.

For more information on the Washington Paid Family Leave rates, visit the agency website.

 

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Pennsylvania Employee SUI Rate Change

Effective January 1, 2023, the Pennsylvania employee State Unemployment Insurance rate has increased from .06% to .07%.  

What is QuickBooks doing to resolve this issue?

  • QuickBooks has updated the new employee SUI rate and it is now active in payroll.
  • QuickBooks will create an adjustment to correct the overall tax calculation for 2023 for any employee with checks calculated at the old, 2022 tax rate.
  • After the adjustment is created, your employee's year to date tax calculation will catch up on their next check for 2023.
  • There is no action required from your business.  QuickBooks will update this post as soon as the rate has been updated in payroll.

 For more information visit the Pennsylvania Department of Labor homepage.

 

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Idaho Administrative Reserve Fund Tax Rate Update

Effective January 1, 2023, Idaho has reinstated the State Unemployment Insurance (SUI) Administrative Surcharge which has a variable rate depending on your overall SUI rate.

What is QuickBooks doing to resolve this issue?

  • QuickBooks is working on applying these new rates into payroll.
  • Once the field is updated to allow the new rates, QuickBooks will update this blog post. 
  • Once the rates are available you will be able to update your rate in payroll and the year-to-date tax will automatically adjust to the assigned rate.

 For more information on Idaho tax rates and to confirm your Administrative Surcharge rate, visit the Idaho Department of Labor homepage.

 

 

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Maine Unemployment Program Administrative Fund Rate Update

Effective January 1, 2023, Maine has updated the Unemployment Program Administrative Fund Rate to .15%.

What is QuickBooks doing to resolve this issue?

  • QuickBooks has completed adding this new 2023 rate into payroll.
  • QuickBooks has completed updating the rate to .15% for all businesses with non-zero UPAF tax rates.
  • QuickBooks has finished adding adjustments to correct the year-to-date 2023 UPAF tax calculation
  • There is no action required from your business as this issue is now resolved.

For more information on Maine Unemployment tax rates, please visit the Maine Department of Labor homepage.

 

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California State Disability Insurance Rate Reduction

Effective January 1, 2023 the California State Disability Insurance rate was reduced from 1.1% to .9%.  While QuickBooks delivered this new rate into Online Payroll in December, it is possible some employers had already created January checks before the new rate was introduced.  This would result in 2023 CA SDI tax calculations at the old, higher rate.

What is QuickBooks doing to resolve this issue?

  • QuickBooks identified all employees that had early January paychecks created prior to the update of the new 2023 tax rate of .9%.
  • QuickBooks has already corrected the overall tax calculation for 2023 for any employee with checks calculated at the old, 2022 tax rate.
  • Any employee impacted will automatically be reimbursed on their next check for any tax over-collected on 2023 paychecks. There is no action required from your business.

For more information on CA tax rates, please visit the CA EDD homepage.

 

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New Jersey State Disability Insurance Rate Reduction

Effective January 1, 2023 the New Jersey Disability Insurance rate was reduced to 0.0%.  While QuickBooks delivered this new rate into Online Payroll in December, it is possible some employers had already created January checks before the new rate was introduced.  This would results in 2023 NJ SDI tax calculations at the old, higher rate of .14%.  

What is QuickBooks doing to resolve this issue?

  • QuickBooks identified all employees that had early January paychecks created prior to the update of the new 2023 tax rate of 0.0%.  
  • QuickBooks created adjustments to correct the overall tax calculation for 2023 for any employee who had a 2023 paycheck before the new rate was added to payroll..
  • Any employee impacted will automatically be reimbursed on their next check for any tax over-collected on 2023 paychecks. There is no action required from your business.

For more information on New Jersey tax rates, please visit the NJ Department of Labor website.

 

 

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December 2022

State Unemployment Insurance Rate Update Issue

An issue occurred if your business updated your State Unemployment Insurance (SUI) or Paid Family Leave (PFL) rate between November 13th and December 4th. QuickBooks defaulted the effective date to the first rate you had in the system. This could have occurred whether you were changing the rate for 2022, 2023, or for a previous tax year or quarter.   

If you updated your rate during this time-frame, you may have seen incorrect SUI or PFL tax rates and calculations for 2022, 2023 or previous years. Your business may have also seen invalid SUI or PFL tax underpayments or overpayments in payroll for previous quarters and years. 

What is QuickBooks doing to resolve this issue?

  • If the rate change impacts 2022 unemployment tax liability, QuickBooks has re-entered the SUI or PFL tax rate your business had in payroll with the original effective date before you changed the rate.
  • QuickBooks has adjusted the 2022 tax liability to match the SUI or PFL tax rate present before this issue occurred.
  • QuickBooks will go back and correct the overall tax liability for 2021 and previous years later in January.
  • QuickBooks will remove any tax payment or overpayments showing as due for previous years impacted by this issue. This is being done to make sure you don’t pay taxes that aren’t actually due, or apply overpayments against future payments that are not valid.
  • QuickBooks will notify any employer impacted of the issue by 12/23/2022. 

Please note that any future SUI or PFL tax rate changes your business adds will work as expected, as the issue has been resolved.  The system will capture the effective date you choose for future rate changes.

How does this impact taxes due or overpayments my business recorded due to this issue?

  • If your business recorded an incorrect tax payment that  showed as due after this issue occurred, please contact support so an agent can help you review and delete the payment or overpayment.
  • If your business recorded or applied tax overpayments related to this issue, please contact support so an agent can help you delete the overpayments.

What action is required from my business?

  • If your business previously attempted to change the rate for 2023 go back and add the rate.  Visit our SUI article for instructions on updating your rate. 
  • If your 2022 tax rate is incorrect, please contact support for assistance in updating the rate and adjusting the 2022 tax liability.

We will reach out to your business again in 2023 when we finish correcting any additional liability that needs to be corrected for previous years. If your business does not receive an email communication related to this issue, you were not directly impacted by the issue.

 

 

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New York State Care and Mental Hygiene Worker Bonus Program 

As part of the Fiscal Year 2023 New York State Executive Budget, New York Governor Kathy Hochul announced the launch of the Health Care and Mental Worker Bonus program. Effective September 2,  2022, this new program aims to attract and retain talent in these industries with payment bonuses for qualified employees. 

Information about the program can be found here. The agency has also published a list of FAQs that can be found here. The ability to setup and track the New York Healthcare and Mental Hygiene Worker Bonus can now be found in our detailed help article.

Employers Requirements

Qualified employers are required to participate in the program. Employers must first submit claims for bonus payments for their eligible employees. Once the process is complete, the employer has 30-days to issue payments to the eligible employees. The maximum any employee may receive is $3,000.

Click here, to see if you qualify for the program. 

Eligible Employees

Employees must meet eligibility criteria, which includes specific work titles, among others. Click here to learn more about employee eligibility. 

Bonus Payment Requirements 

Bonus payments are based on vesting periods. A vesting period is defined as a series of six-month periods between the dates October 1, 2021, through March 31, 2024. Click here to learn more about vesting periods. A qualified employee is eligible for up to two vesting periods per employer. 

These bonus payments are exempt from employee NY state and local taxes.

 

 

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New Hampshire Voluntary Paid Family Leave

New Hampshire has implemented a voluntary paid family medical leave program, called Paid Family and Medical Leave (NH PFML). The program gives employees paid time off to care for themselves, ill family members, or a new child. Unlike traditional state-mandated PFML plans, NH PFML is voluntary for both you and your employees. Find out more at the agency website.

How the NH PFML program works:

  • This program is optional for both you and your employees.
  • Starting December 1, 2022, you can get PFML insurance from MetLife.
  • You can get a Business Enterprise Tax (BET) credit equal to 50% of the NH PFML insurance premium you pay (doesn’t cover employee contributions).
    • Complete and send form DP-160 to the NH Department of Revenue Administration to claim the BET credit.
    • If you purchase other PFML insurance plans, you don’t qualify for the BET credit. 
  • If you don’t provide coverage, your employees can purchase a NJ PFML individual insurance plan through MetLife during open enrollment, January 1, 2023 through March 2,2023. 
  • If you have less than 50 employees, you can (but aren’t required to) collect premium payments through payroll deductions. Otherwise, your employees need to make  the payments. 
  • If you have 50 or more employees, you’re required to collect your employee premium payments through payroll deductions. If you pay 100% of their premium, you don’t have to take payroll deductions. 
  • You’ll need to pay and report the premiums yourself. 

 QuickBooks Online Payroll is currently working on setting up the ability to track this voluntary program for Online Payroll.  We expect a full solution to be available in early 2023.  We will contact your business as soon as the solution is available in payroll.

 

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November 2022

Arizona Withholding Tax Rate and Certificate Changes

QuickBooks Online Payroll has some information to share with your business related to changes to the Arizona withholding certificate and tax rates.

Due to the passage of Senate Bill 1828, Arizona's individual income tax rates are being reduced. As a result, Arizona recently revised the Employee's Arizona Withholding Election form, requiring all employees to complete an updated 2023 A-4 tax form. You can find a copy of the updated tax form on the agency website. The QuickBooks Online Payroll Team has completed our implementation of the new rates and they can be updated by electing "Employees" and then choosing the employee name and then selecting "Employment Details."   

What if my employee does not update their old Arizona Form A-4?

As an employer, you should select the new 2.0% default rate on behalf of the employee.

What action must I complete in payroll?

Have your employees fill out a new Arizona A-4 form as soon as possible and update the AZ withholding rates under the "Employment Details" section of your employees setup in payroll.

Details and FAQs related to the new withholding requirements are located on the Arizona Department of Revenue homepage. 

Please give us feedback about the payroll compliance content we're providing you!

 

 

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QuickBooks Payroll Down for System Maintenance on Friday, November 18

QuickBooks Online Payroll will be temporarily unavailable while we perform system maintenance on Friday, November 18.  The system outage will be for just 2 hours, beginning at 10:30 pm PST. 

Please plan accordingly for this payroll system downtime.  We appreciate your patience during this time frame!

 

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Kentucky Service Capacity Upgrade Fund

The Kentucky Service Capacity Upgrade Fund (SCUF) has been reinstated for the tax year 2023 after being eliminated in 2022. During the 2018 Legislative Session, the General Assembly enacted the Service Capacity Upgrade Fund (SCUF) through HB 487, Section 139. The SCUF works by decreasing your base unemployment rate by .075% and then collecting the same amount via the separate fund. There is no increase or decrease in the tax you will pay. This reduction will divert 0.075% of the contributions that would have been applied to your employer reserve account and instead apply them to SCUF. 

QuickBooks Online Payroll is currently working on adding the SCUF rate of .075% back into payroll. Before 2023 begins, you should update the State Unemployment Insurance rate you receive from the agency. QuickBooks Online Payroll has applied the .075% SCUF rate for your business in payroll.  If you created 2023 paychecks before the rate was updated, QuickBooks will correct the year-to-date 2023 tax calculation before the payment and filing are due in April.

Please visit the agency website for more information on the KY SCUF tax.

Please give us feedback about the payroll compliance content we're providing you!

 

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October 2022

Colorado Paid Family Medical Leave Program starting in 2023

QuickBooks Payroll Compliance Team here with important information for our Colorado payroll customers!  We're here to update you on the new Paid Family Leave program Colorado is introducing in 2023.  As you've probably heard via email alerts from QuickBooks, Colorado is adding a mandatory Paid Leave program/tax effective January 1, 2023. The ability to setup and track Colorado Paid Leave is now live in QuickBooks Online Payroll.  For steps on setting it up in payroll, visit our Colorado Paid Leave article.

How the CO PFML program works:

  • For Colorado Paid Family Leave, the premium is 0.9% of each employee's gross wages which can be split 50/50 between employer and employee. Businesses with nine or fewer employees do not have to contribute to the program. Still, they need to remit their employees' share (0.45%) of the premium on behalf of employees each quarter.
  • Some employers may be exempt from the tax if they offer a private plan approved by the FAMLI Division. Per guidance from the agency, they are still figuring out how to review private plans and may not immediately provide exemptions.
  • The FAMLI Division has created a temporary procedure whereby all Colorado employers will begin paying premiums in 2023, and those who secure an approved private plan effective on or before January 1, 2024, will be issued a refund of paid 2023 premiums, minus the private plan administration fee. Additional information can be found on the agency's private plan guidance homepage.

Additional Colorado Paid Family Leave tax details are available via the Colorado FAMLI website.

QuickBooks hosted a webinar on December 9th with the Colorado Department of Labor and Employment (CDLE) and QuickBooks Payroll Compliance Team.  tax In case you missed the webinar, here is the:

 Please give us feedback about the payroll compliance content we're providing you!

 

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Oregon Paid Family Leave Medical Leave Program January 2023

QuickBooks Payroll Compliance Team here with important information for our Oregon payroll customers!  We're here to update you on the new Paid Family Leave program Oregon is introducing in 2023.

Oregon has implemented paid family medical leave, called Paid Leave Oregon. The program gives employees paid time off to care for themselves, ill family members, or a new child. The ability to setup and track Oregon Paid Leave is now live in QuickBooks Online Payroll.  For steps on setting it up in payroll, visit our Oregon Paid Leave article.

How the OR PFML program works:

  • The total contribution rate is 1% and is paid on the first $132,900 in wages. 
  • Your employees pay 60%. Your business may choose to pay the employee portion as a benefit to your employees.  If you have more than 25 employees, your business pays 40%. If you have less than 25 employees, you don’t pay an employer portion.  The agency has a guide and chart to help you determine your employee count.

 

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Washington Standard Occupation Code Reporting

Effective for the 4th quarter 2022 employee wage report, Washington now requires all employers to report Standard Occupation Codes (SOC) for each employee who works in Washington. Standard Occupation Codes classify workers into occupational categories to collect, calculate, or disseminate data. You must assign the appropriate code to each employee in your payroll account. The ability to add the codes in payroll will be available starting Tuesday, November 15th. 

What action is required from my business?

You must add the codes to each employee profile in your payroll account by December 31, 2022! At the beginning of January, you will not be allowed to run payroll if you have not assigned the codes to your employees. Our detailed SOC article provides step-by-step instructions for setting them up in payroll. 

Please visit the Washington Employment Security Department website for additional information on Washington Standard Occupation Codes.  We hope this information provides your business with all the information to get ahead of this new agency requirement!

Please give us feedback about the payroll compliance content we're providing you!

 

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New York State Care and Mental Hygiene Worker Bonus Program 

As part of the Fiscal Year 2023 New York State Executive Budget, New York Governor Kathy Hochul announced the launch of the Health Care and Mental Worker Bonus program. Effective September 2,  2022, this new program aims to attract and retain talent in these industries with payment bonuses for qualified employees. 

Information about the program can be found here. The agency has also published a list of FAQs that can be found here. 

Employers Requirements

Qualified employers are required to participate in the program. Employers must first submit claims for bonus payments for their eligible employees. Once the process is complete, the employer has 30-days to issue payments to the eligible employees. The maximum any employee may receive is $3,000.

Click here, to see if you qualify for the program. 

Eligible Employees

Employees must meet eligibility criteria, which includes specific work titles, among others. Click here to learn more about employee eligibility. 

Bonus Payment Requirements 

Bonus payments are based on vesting periods. A vesting period is defined as a series of six-month periods between the dates October 1, 2021, through March 31, 2024. Click here to learn more about vesting periods. A qualified employee is eligible for up to two vesting periods per employer. 

These bonus payments are exempt from employee NY state and local taxes.

QuickBooks is currently adding a solution to handle the unique taxation requirements.  A link to setting up the Health Care Bonus pay type will be added here as soon as that solution becomes available later in December.