Your comment "A corporation located in US can legally hire a US citizen as employee residing overseas." does not support the fact that QBO is not able to provide adequate payroll services for this. When a U.S. citizen works for a U.S. entity abroad; they are considered domiciled in a State which they have the most ties to. Their wage earnings are taxed based on each State's income tax laws. For example, Missouri considers a domiciled taxpayer to be a Non-Resident and does not tax their wage earnings if they are not sourced from Missouri. QBO could easily create a "foreign/domiciled" work location, which would reflect the work location being abroad (i.e. a foreign address) and the taxpayer being domiciled in a given State. In the case of Missouri, the W-2 would reflect MO as the State with $0 earned wages and tax withholding. The income may or may not be subject to unemployment tax depending on the State.
