Employee Tax Setup

Use this screen to maintain all payroll tax information for each employee, in addition to tax information for temporary work states.

The Payroll Check Calculation will create no "subject to" earnings and taxes for an add-on or deduction with tax effects for all taxes in a state, county, or local place that is tax exempt but has an add-on or deduction code that reduces gross wages for that state, county, or local place.

Resident vs. Permanent work state: Use these settings for non-direct employees who might live in one state but work in the corporate or branch office which is in a different state. For example, if you live near a state border and you have an employee who resides in one state (CT) and commutes to the office in another state (NY)daily, they are the perfect example of how this is best used. Their resident state is CT and permanent work state is NY.

Job cost employees never have a permanent work state. Their tax calculations are controlled based on the Job state using the Payroll Tax Table Resident Exemption settings.

Entering W-4 Withholdings

The W-4 form was updated in 2020 with new filing statuses. Visit the Entering W-4 Withholdings topic for steps on how to enter W-4 withholdings from this form for new employees, or make any changes to withholdings for existing employees.

Note: For existing employees with a filing status of SINGLE or MARRIED that do not need to update their withholdings, no changes need to be made employee's tax setup.