QuickBooks is changing their automated payroll tax settings.

What exactly is QuickBooks changing?

Starting July 1, 2026, QuickBooks Online Payroll will pay and file all payroll taxes that are already set up automatically. No longer will you be able to manually submit payments or filings for those taxes in the Payroll Tax Center, and the option to turn off automated taxes will be removed from payroll settings. QuickBooks, to save the time you spend tracking, paying, and filing taxes manually, manages your tax payments and filings for you. QuickBooks is also updating the Payroll section of the QuickBooks Terms of Service (“Terms”). You agree to the updated Terms by continuing to use QuickBooks Payroll.

What action do you need to take?

To ensure no disruptions to your payroll, your tax setup needs to be completed by June 30, 2026. To do this, go to Payroll Overview and finish the to-do items for tax setup.

What This Means for Employers:

While QuickBooks is positioning this update as a simplification of payroll tax compliance, employers should be aware of several important operational changes.

First, payroll tax setup must be completed by June 30, 2026. If the required tax setup steps are not completed, QuickBooks may prevent payroll from being processed until the necessary information and authorizations have been provided.

Second, beginning July 1, 2026, QuickBooks will automatically withdraw payroll tax funds from the bank account on file when payroll is processed or whenever payroll tax liabilities increase. Businesses that are accustomed to making monthly or semiweekly payroll tax deposits should understand that tax funds may be withdrawn earlier than expected under the automated process.

This change may accelerate the timing of cash outflows and could impact cash flow planning, particularly for employers who have historically relied on the time between payroll processing and tax deposit deadlines.

Finally, once automated tax payments and filings are enabled, employers will no longer be able to manually submit payroll tax payments or payroll tax filings through QuickBooks Payroll. QuickBooks will assume responsibility for supported tax payments and filings after setup has been completed.

Additional Considerations:

• Verify that the bank account listed in QuickBooks Payroll is accurate and has sufficient funds available for automatic tax withdrawals.
• Review any unpaid payroll tax liabilities or filing requirements for periods before July 1, 2026, as these remain the employer’s responsibility.
• Be aware that payroll tax funds may be withdrawn when payroll is processed, even if your business has historically followed a monthly or semiweekly tax deposit schedule.
• Complete the required setup and acknowledgement process before June 30, 2026 to avoid disruptions in payroll processing.

QuickBooks updating the payroll tax settings reduces the need to track deadlines and complete filings manually, streamlining payroll tax management. With an increase in payroll automation, you can spend more time focusing on business priorities and less time on administrative tasks.

If you are unsure whether your payroll tax setup is complete or how this change may affect your business, please contact our office for assistance.