How to set up an employee to be exempt from paying state taxes.
1. Click Cards, point to Payroll, click State Tax, and then select the appropriate state.
2.In the Additional Withholding box, type -$1.00 (negative one dollar). This offsets the Estimated Withholding amount in the next step.
3. In the Estimated Withholding box, type $1.00 (positive one dollar), and then click Save. (If you enter an amount in the Estimated Withholding box, the system will withhold this amount per pay run instead of using the state tax calculations.)
This method will not withhold state tax, but will update wages.
Note If you have state flat tax rates that are set up for this pay code, the resolution steps will not take effect. To verify your state flat tax rates, click Cards, point to Payroll, and then click Pay Codes.
This article was TechKnowledge Document ID:24338