How do I setup exempt withholding from federal income tax?

Question

I currently have Payroll Mate 2012 and 2013 as well as Option #6 for both years.  I would like to setup exempt withholding from federal income tax. How do I do that?

Answer 1

Please follow these simple steps:

1. Open the employees screen by clicking the “Employees” button from the toolbar on the left.
2. Select the employee you want to make except from Federal Income Tax and click the Edit button. This will bring up the employee Modify Wizard.
3. Click the Next button until you get to the Taxes screen.
4. Uncheck the box for “Federal Income Tax” [IMPORTANT READ NOTE BELOW]
5. When you uncheck that box you get a warning message that Form 941 and W2 forms will be affected.
6. Click the Next button until get to “Finish” in order to save any changes.
7. Now when you create a new check Federal Income withholding will not be taken out.

***********VERY IMPORTANT NOTE*******************

When you uncheck federal income tax you are telling the software that that the wages are not taxable therefore not included on Form 941 or W2.  If you would like the software to track these wages, but you just want the Federal Income Tax to be set to zero then you need to MANUALLY ZERO OUT THE FEDERAL WITHHOLDING ON THE CHECK ITSELF at the time when you do payroll.

Changes in the employee set-up such as un-checking the federal income tax box will not change the checks already in the payroll system. Checks going forward will include the changes.

 

 

Real Business Solutions Support Team, Makers of W2 Mate and Payroll Mate

 

http://www.realtaxtools.com/

support@realtaxtools.com

708-479-8731