Payroll Items > Tax Exemptions tab

Alerts and notices

The Tax Exemptions tab lists all possible taxes that the application calculates for this client. Use this tab 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. Clicking these buttons opens the Tax Exemption Details dialogs where you can exempt individual state jurisdictions from the calculation of a state tax type.

Choose Setup > Payroll Items and then click the Tax Exemptions tab.

Fields & buttons

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. Click the + 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. Details

You cannot 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