Exempting Employee from Unemployment

In order to mark an employee exempt from Federal/State Unemployment you will have to setup an additional Payroll Item Code. This Payroll Item Code should be setup exactly like the main Addition Payroll Item for the employee. Then you would mark this item as being exempt from Federal/State Unemployment.

1. Click on Setup -> Payroll -> Payroll Items
2. Bring up their current Addition Payroll Item Code and write down the information.
3. Now enter a new Payroll Item Code using the information gathered in the previous step.
   
   This code will be the one used on employees who will be exempt from Federal/State Unemployment Tax.
   
   
4. Click on the Federal and/or State Radio Button(s) and mark this Payroll Item to be exempt from Unemployment Tax.
   
   Note: On the Federal Screen it is a check box and on the State Screen you will have to enter a State Code.
   

If you have not entered any transactions for the employee you are all set. Otherwise you will have to change any previously entered transaction that should have been exempt. You can use (2) different Methods

Method 1

1. Click on Setup -> Payroll -> Employee Utilities
2. Click on the Sub/Add PR Items tab.
3. Select the employee(s) from the list.
4. Select the old Payroll Item Code in the Change Item From screen.
5. Select the new Payroll Item Code in the To this Item screen.
6. Then click OK.
   
   This will change the employee record and All transactions for this employee.
   
   
7. Done

Method 2

1. Click on the Employee Maintenance Screen and select the employee to change.
2. Click on the Items radio button.
3. Change the Additions Payroll Item Code from the old code to the new code.
4. Click OK to update the employee.
5. Next go into each transaction for this employee and change the code.
   
   While this works it is more prone to error.
   
   
6. Done