October 8, 2024in Articles0by Tommy Stephens
In a series of emails, Intuit announced several changes to QuickBooks Online Payroll. To many, these changes may not seem like major ones. However, failing to act can have lasting negative lasting impacts. Therefore, if you are a QBO customer or have clients who use the service, act before the end of the year.
Tax Withdrawal Timing To Change
Effective January 1, Intuit will begin withdrawing payroll taxes from your bank account when payroll is processed. This practice started on October 1 for subscribers with employees in eleven states. These states include Arizona, California, Florida, Georgia, Illinois, Kansas, North Carolina, Nevada, Tennessee, Texas, and Virginia. This change becomes effective on January 1, 2025 for all other subscribers who do not opt out.
If you agree with this change in payroll tax withdrawals, you must indicate your consent to Intuit before December 30, 2024. You can do so by navigating to Payroll Settings in QuickBooks Online and clicking Keep Using Automated Taxes.
Opting Out Of The New Withdrawal Process
You can opt out of the new payroll tax withdrawal process if you desire. However, to do so, you must turn off the Automated Taxes and Forms option in Payroll to do so. If you opt-out, Intuit will no longer remit payroll taxes on your behalf. Instead, you must remit payroll taxes to the various taxing jurisdictions.
For more information on this change, click here.
What’s Happening With W-2 Processing
Intuit will no longer print and mail W2 forms at no charge to employees as part of the subscription offering. If you want Intuit to print and mail W2 forms, you can select this service for a cost of $4 per W2. This change is effective for W2s issued for 2024.
Actions Required By You
No action is required if you want Intuit to print and mail W2 forms on your behalf. Intuit will continue to print and mail W2s as the company has in the past. They will also send electronic copies to employees. The only difference is that you will be billed $4 per form.
However, if you want to send only electronic copies of W2 forms to employees and avoid the related charges, additional action is necessary. First, you must log in to your account by January 3, 2025. Then, navigate to Payroll Settingsand adjust the necessary settings. For more information on this change, click here.
What’s Happening With 1099 Processing
Similar to the changes associated with printing W2s, Intuit announced changes associated with 1099s. Specifically, the company announced a $4 per 1099 charge to have Intuit print and mail Forms 1099 to contractors. However, unlike W2s, this change will not necessarily apply to all Forms 1099. Specifically, if your vendors and contractors consent to electronic delivery of 1099s, Intuit will send the forms electronically to those vendors and contractors. On the other hand, if they have not consented to electronic forms, you can choose to download, print, and deliver the documents or have QuickBooks print and mail the necessary forms for $4 per form.
Actions Required By You
No action is required if you want Intuit to provide electronic copies of 1099s to your contractors and vendors that have consented to electronic delivery. On the other hand, to avoid any charges for producing and mailing 1099s, you should obtain consent from your vendors and contractors to receive the forms electronically.
Summary
The new world of software-as-a-service requires us to stay on top of changes in our subscriptions, lest we potentially face undesired actions and unwarranted costs. If you or your clients use QuickBooks Online, you should address two recently announced changes by Intuit. To avoid unnecessary charges, take the above actions regarding processing Forms W2 and 1099. Doing so will help you get the desired results without incurring excessive costs.
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Tommy Stephens
Tommy is one of the shareholders in K2 Enterprises (www.k2e.com), affiliating with the Firm in 2003 and joining as a shareholder in 2007. At K2, Tommy focuses on creating and delivering content and is responsible for many of the Firm's management and marketing functions. You may reach him at tommy@k2e.com.
