PAYROLL - EMPLOYEE STATE TAX SETUP RESIDENCE VS WORK FIELDS

We have an employee that is a resident of a No State taxes, but paid out of a state where there are state taxes.  

Not sure how to setup Sage 300 CRE payroll system to have not withhold any state tax. I am not able to find anywhere how the residence state vs work state affect yearend W-2 or qtrly tax reporting.

Any input appreciated.

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    Sage taxes according to where the job is located.  You can stop it, but you'd have to ask your CPA if that's the correct thing to do.  Inside the tax button for the employee setup, you can change the "adjustment method" to No Tax and no taxes will be withheld.  If you change it to "Exempt" it will not accumulate wages or withhold taxes.  You can learn more about this in the Payroll - Help - Help Topics.  

    If you use Aatrix, it will not like a tax withheld in a state if there's no wages in that same state.  If you get this error when you process W-2's you have to call Aatrix and they will give you a fix for this.