Available to Basic Payroll, Full Service Payroll
There may be times that you may need to make an employee exempt from certain taxes that they are not liable to pay, such as a pastor of a church or your minor child who works for you. If you mark an employee exempt from a tax, no taxes will be calculated on that tax. Please be sure to check with your accountant before making any tax exemption changes to an employee in your payroll software.
đĄYou will need to contact Support to correct previous payrolls that need adjusted because of incorrect exemption settings. Changing exemption settings in the middle of the year may result in the need for amended returns.
If you need to make a company exempt from any taxes, you'll change these in the company settings. Check out this article, "Company Payroll Tax Settings In Patriot Software."
How to Make an Employee Exempt from Federal Income Tax Withholding
Go to Employee List > {Employee Name} > Taxes.
Under Federal Income Taxes, click "Edit."
Select Exempt under Exemption from Withholding.
Click Save.
How to Make an Employee Exempt from State Income Tax Withholding
Go to Employee List > {Employee Name} > Taxes.
Under State Income Taxes, click Edit.
Select Exempt under Exemption from Withholding.
Click Save.
How to Make an Employee Exempt from Local Tax Withholding
Go to Employee List > {Employee Name} > Advanced Tax Settings.
Under Local Income Taxes, click Add Local City Taxes Exemption Status.
Click Exempt under Local City Exemption Status.
Add the Effective Date, (or the date the employee was exempt from local taxes.)
Click Save.
How to Make an Employee Exempt from State Specific Taxes
For state specific taxes, such as PFML and State disability insurance
Go to Employee List > {Employee Name} > Advanced Tax Settings.
Under the tax name you want to add an exemption click Add {TAX NAME} Exemption Status.
Click Exempt.
Add the Effective Date meaning the date the employee was exempt from the tax, example 1/1/20xx.
Click Save.
How to Make an Employee Exempt from SUTA Tax
Go to Employee List > {Employee Name} > Advanced Tax Settings.
Under SUTA, click Add SUTA Exemption Status.
Select Exempt under Add Suta Exemption Status.
Add the Effective Date, (or the date the employee was exempt from SUTA taxes.)
Click Save.
How to Make an Employee Exempt from FUTA Tax
Go to Employee List> Choose Employee> Advanced Tax Settings.
Under FUTA, click Add FUTA Exemption Status.
Select Exempt under FUTA Exemption Status.
Add the Effective Date (or the date the employee was exempt from FUTA taxes.)
Click Save.
How to Make an Employee Exempt from Social Security and Medicare
Go to Employee List > Choose Employee > Advanced Tax Settings.
Under Social Security and Medicare, click Add Social Security and Medicare Exemption Status.
In the box Social Security and Medicare Exemption Status,select the option that matches your employee's situation:
Not Exempt
Exempt from Medicare and Social Security
Exempt from Social Security Only
Add the Effective Date (or the date that the employee was exempt from Medicare and/or Social Security.)
Click Save.
For more information on making edits to an employee, please check out our article, "Editing Employee Tax Information."