Written By: Andrea White, CPA, Senior Manager
QuickBooks has recently announced significant changes to how it handles automated payroll tax withdrawals, effective April 1, 2025. This update requires immediate action from users to ensure continued automation of their payroll tax payments and filings.
What's Changing?
Starting April 1, 2025, QuickBooks will modify the process for automated payroll tax withdrawals. Instead of withdrawing payroll taxes when they are due, QuickBooks will now withdraw them every time payroll is processed and whenever there is an increase in taxes owed. Additionally, on April 1, 2025, QuickBooks will make a one-time withdrawal for federal unemployment taxes (FUTA).
Immediate Action Required
By March 31, 2025, a primary or company admin, including accountants with these roles, must sign in and confirm their desire to continue using automated tax payments and filings. This can be done by selecting "Continue using automated taxes" in the email notification from QuickBooks or by navigating to the Payroll Overview section and selecting "Keep using automated taxes."
If QuickBooks does not receive confirmation by March 31, 2025, automated taxes will be turned off starting April 1, 2025.
Confirm to Continue Using Automated Taxes
- Sign in as a primary or company admin, including accountants with these roles.
- Select "Continue using automated taxes" in the email or go to Payroll Overview and select "Keep using automated taxes."
- Ensure this is done by March 31, 2025, to avoid disruption in automated tax services.
What Happens If You Confirm?
If you confirm to continue using automated taxes, starting April 1, 2025:
- One-Time FUTA Withdrawal: QuickBooks will make a one-time withdrawal for any unpaid FUTA taxes to date. Ensure sufficient funds are available in your account before April 1. You can preview the current FUTA tax amount in the Payroll tax center.
- Regular Withdrawals: Other unpaid taxes for periods ending before April 1 will be withdrawn as usual before they are due.
- Automated Withdrawals: QuickBooks will automatically withdraw payroll taxes from the bank account on file when payroll is processed, a past payroll is adjusted, a tax rate is updated, or any time there is an increase in taxes owed.
- Auto Payroll Preview: Your Auto Payroll preview email will include the amount of payroll taxes to be withdrawn. After payroll is processed, you will receive a receipt via email, and the amount will be posted in the Payroll tax center.
- Tax Jurisdictions: QuickBooks will continue to withdraw payroll taxes only for tax jurisdictions for which you complete tax setup. Check the Automated taxes section of the Payroll Overview page to find out the status of your tax setup for each jurisdiction.
Important Considerations
- Authorization: By confirming, your company authorizes Intuit to hold onto the payroll tax funds until they are due to the relevant taxing authority. No interest or earnings will accrue to the company for any of the money held by Intuit.
- Preparation: Ensure you have sufficient funds in your account to cover the one-time FUTA withdrawal and any subsequent payroll tax withdrawals.
For more information or assistance with this transition, please contact Porte Brown to ensure you are prepared for the upcoming changes.
