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Set up employees and payroll items

Set tax exemptions for payroll items

You can use the
Tax Exemptions
 tab of the
Payroll Items
 screen to mark the checkboxes for any taxes for which the selected payroll item should be exempt from taxable wages and tax calculations.
State taxes have Ellipsis buttons next to them. Selecting an ellipsis opens the
Tax Exemption Details
 screen where you can exempt individual state jurisdictions from the calculation of a state tax type.
The
Tax Exemptions
 tab lists all the taxes for which the client could be liable. Mark the checkboxes for the taxes for which the payroll item should be exempt. Select the plus signs to expand the list of taxes and display all federal, state, or local taxes. You can select the taxes individually or as a group, by marking the checkbox for
All
,
Federal
,
State
, or
Local
.
The tab is grayed out (unavailable) when certain calculations or special types are selected for the payroll item, because the application will automatically adjust those tax exclusions.
You can't edit the tax exemptions when the following settings are selected for a payroll item:
  • Pay items:
    • Special type: Nonemployee compensation
  • Deduction items:
    • Calculation type: Percent of net pay
    • Special type: Anything in the Retirement/Cafeteria plan drop-down list
    • Special type: Garnishment: Federal levy
  • Employer contribution items:
    • Calculation type: Percent of net pay

This article applies to:

  • Product: Accounting CS
  • Subject: Payroll checks, Setup
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