Set up employee payroll tax information

Select

Setup

,

Employees

, then the

Payroll Taxes

tab.

In the

Federal withholding

section: For employees being added or updated after January 2020, mark the

Use 2020 (or newer) W-4

checkbox and follow the remaining steps in this section. For employees added in 2019 or before, do not mark the checkbox, but rather select the

2019 (or prior) W-4

button to view

or modify

the existing federal withholding information there.

Specify the filing status for the employee and make any changes to the other fields in this section as needed.

To withhold any additional amounts for this employee, make a selection from the dropdown (Additional Amount, Additional Percentage, Fixed Amount, or Fixed Percentage) and then enter the appropriate amount or percentage.

Mark any checkboxes that are appropriate for this employee.

If the employee is a nonresident alien, mark the

Nonresident alien

checkbox, and if the employee is tax exempt, mark the

Tax exempt

checkbox.

If the employee is eligible for earned income credit, select their EIC status from the dropdown and, if applicable, mark the

Spouse has form W-5 in effect

checkbox.

In the

Other Federal Settings

section, mark the

Full FUTA rate

checkbox only if the full FUTA rate of 6.0% should be used for this employee instead of the standard 0.6%.

If the employee qualifies for the new hire FICA credit (from the HIRE act),

mark the

New hire FICA credit

checkbox.

In the

State withholding

section, enter state withholding information. Other than the

State

field, the fields in this section vary by state, because they are based on the fields for each state's W-4 form.

In the

Unemployment

section, take note of which state or states are listed (if the employee works in multiple states).

In the

Taxes

section, you have the options to override the application's multi-state withholding calculations and to adjust the employee's taxable wages if necessary.

In the

Taxes

grid, all the applicable federal and state taxes are listed automatically based on the address information for both employee and client, but you can modify GL liability and expense account numbers for the tax item. To modify the GL liability and expense accounts for a tax item for each of the employee's active location/department combinations, select the ellipsis button to open the

Employee Tax Item Settings

window. This will gray out the the GL account information fields in the Taxes grid. In addition, you can mark the employee as exempt for individual taxes.