Add or Modify an Employee's Tax Information

To add or modify an employee's tax information:

1. Open the Taxes tab in the employee record. How?
   1. In the Home window, click Employees & Payroll on the navigation pane.
   2. In the Tasks pane, right-click the Employees icon and select Modify Employee from the menu.
   3. Select an employee from the list and click OK.
   4. Click the Taxes tab.
2. Enter the following information:

Federal and State Taxes. In both these boxes, enter additional taxes that the employee may request you deduct to cover federal or state taxes on other income or capital gains.
Tax Table. Select the tax table used to calculate the employee's payroll taxes.
Allowances. Enter the number of federal and state withholding allowances being claimed by the employee. The number of allowances that you can enter in these boxes depends on the tax table you have selected; for some states, this number must be calculated from other information. For certain states, you may also need to enter a number in the second (center) field to record additional information.
Some states need to be handled differently:
• California. In the State Allowances field (the first State field), enter the total number of allowances for tax credits from the employee’s DE-4 or W-4 form. In the second (center) field, enter either the number of these allowances which are for additional allowance for itemized deductions, as shown by line 2 on the employee’s DE-4 form, or the number requested by the employee if form W-4 is used.
• Illinois. In the State Allowances field (the first State field), enter the number of basic allowances. In the second (center) field, enter the number of additional allowances.
• Louisiana. In the State Allowances field (the first State field), enter only the number of dependent credits claimed for withholding (may be 0 or more).
• Massachusetts. In the State Allowances field (the first State field), enter the number of withholding exemptions from the employee’s M-4 or W-4 form. If the employee also claims the blind exemption, enter "1" in the second field.
• Mississippi. In the State Allowances field (the first State field), enter the total amount of exemption claimed, divided by 500 (for example $6,000 / 500 = 12).
• Virginia. In the State Allowances field (the first State field), enter the number of withholding exemptions from the employee's VA-4 or VA-4P form. In the second field enter the number of total exemptions for being age 65 or over, or blind according to the employee's VA-4 or VA-4P form.
Status. From the list, select your employee's federal and state filing status. For most employees this usually refers to their marital status.
Some states require special statuses:
• Arizona. Refer to the employee's A-4 form to enter one of the following filing status options in the State Status field:
  

  Options	Tax Rate
  Required	2.7% of gross taxable wages
  Rate 1	2.7% of gross taxable wages
  Rate 2	3.6% of gross taxable wages
  Rate 3	4.2% of gross taxable wages
  Rate 4	5.1% of gross taxable wages
  Rate 5	1.3% of gross taxable wages
  Rate 6	1.8% of gross taxable wages
  Rate 7	0.8% of gross taxable wages
  Zero withholding	0% of gross taxable wages

• Louisiana. In the State Status field, enter the employee's filing status. The program automatically calculates the number of personal exemptions claimed for withholding, according to the filing status entered.
• New Jersey. Enter one of the following filing-status options and the program will use the appropriate New Jersey tax rate to calculate income tax withholding:
  

  Options	Tax Rate
  Single	A
  Married filing separate	A
  Married filing joint	B
  Head of household	B
  Optional higher rate	C
  Optional higher rate 2	D
  Highest rate	E
Social Security/Medicare Tax Exempt. Select this box if this employee doesn't need to pay social security and medicare.

3. Click Save and Close.