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Intuit

Adjust employee exemption taxes

Learn how to adjust exemption taxes for state unemployment insurance.

Did you process payroll for an employee, and after realize that they should have been either exempt or not exempt from state unemployment insurance?  We'll show you how to adjust the employee's record to account for either scenario.

Before you get started

Before you get started, you need to know what the Intuit and QuickBooks Online Payroll products support when it coms to updating state unemployment insurance.

Support

  • All 50 states and District of Columbia
  • employee paid taxes (such as CA SDI) will be recalculated
  • amounts owed to employees will be paid on the next check
  • amounts owed from employers will be recaptured on the next check
  • Federal unemployment tax (FUTA) will be recalculated to 6%

Don't support

  • Social Security/Medicare exemptions
  • FUTA exemptions
  • Recalculation in a previous tax year

When an employee is marked as non-exempt, but should have been exempt

When an employee should've been exempt from state unemployment insurance, but was recorded as non-exempt, follow these steps.

  1. Select Workers, then select Employees.
  2. Choose the name of the employee.
  3. On the Pay section select the edit (pencil icon).
  4. Under withholdings select the edit (pencil icon).
  5. Select Tax exemptions. Then choose the state tax to be exempted (like CA SUI and ETT and CA SDI).
  6. Select Done.
  7. A window pops up to inform you of your next steps, the taxes that are updated and whether or not you have to reimburse the employee in the next check.
  8. You will see adjustment checks on you paycheck list.

When an employee is marked as exempt, but should have been non-exempt

When an employee should've been marked as non-exempt from state unemployment insurance, but was recorded as exempt.

  1. Select Workers, then select Employees.
  2. Choose the name of the employee.
  3. On the Pay section select the edit (pencil icon).
  4. Under withholdings select the edit (pencil icon).
  5. Select Tax exemptions. Then uncheck the state tax (like CA SUI and ETT and CA SDI).
  6. Select Done.
  7. A window pops up to inform you of your next steps, the taxes that are updated and whether or not you have to collect from the employee in the next check.

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