What Happens when an Employee is Exempt from State Withholdings?
- Depending on the State Form being completed, employees can mark that they are Exempt from State Withholdings. If an employee has claimed exemptions and checked Exempt, then an error message will appear letting them know what action needs to be taken to claim one or the other.
- Once initialized, the deduction line for the State Form that was completed will still be created in the Filing Status tab of the employee record. This line will show that the employee has claimed 0 exemptions. Additionally, you can see in the PR Employee Deductions/Liabilities program that the calculation for this employee's State Withholdings has an override set to 0. This ensures that Exempt employees will have no State Withholdings.
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