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Level 1


The organization I need to deal with is a 501(c)(3) and should be exempt from FUTA tax.  There was FUTA tax figured on the payroll and none due.  I can make an adjustment for the tax, but can't override the taxable for the 940 form.  I've tried a number of ideas, but none work.  Outside of using a form from the IRS website and filling it in properly, what would you suggest.

1 Comment 1
Level 15


You want to Edit the Employee Default to show that your entity is not subject to this, in the Tax Settings. This is used every time you Add a New Employee.


You want to Edit each existing Employee name and edit their tax settings to show they are not Subject to this tax.


You want to clear out the amount owed. If there are not many employees or paycheck dates, I like to Open each Paycheck Detail, Unlock Net Pay, set the FUTA to 0, bottom left. Otherwise, make one Payroll Liability Adjustment per Employee name to zero out the FUTA. You might want to do that per month or per quarter, as well.


Then run the Payroll Summary report for this calendar year, to see if that is right. This report is why you do it Per Name, even though the tax item is an employer-only item.

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