Lesson 4.3: Employee Tax Information

FastFund Payroll includes continuously updated tax tables for all federal, state, state supplemental, and local income taxes. While the system manages the underlying tax brackets behind the scenes, you must configure each individual employee’s specific tax filing status and withholding requirements.

All of the data entered in this section should be taken directly from the employee’s completed federal and state W-4 forms.

Important Security Note: Because the employee tax area contains highly sensitive Personally Identifiable Information (PII)—including the employee’s Social Security Number—access to this tab is strictly limited. Only users who have been explicitly granted the Payroll permission in their user setup can view or edit this screen.

Accessing Employee Taxes To set up an employee’s taxes, navigate to Lists > Employees, open the specific employee’s record, and click on the Taxes tab. By default, every new employee is populated with standard Federal Income Tax (FIT) and State Income Tax (SIT) profiles. The system automatically assigns the state tax jurisdiction based on the state entered in the employee’s Primary Contact Information address.

Configuring Federal Income Tax (FIT) To enter the employee’s federal withholding details, click on the FIT name in the tax list. The data entry window mirrors the five steps of the official IRS Form W-4:

• Step 1: Select the employee’s Marital Status (e.g., Married, Single, Head of Household). If the employee is using an older W-4, you can also enter the Number of Exemptions.
• Step 2: Check the Multiple Jobs or Spouse Works box if the employee indicated they hold more than one job or file jointly with a working spouse.
• Step 3: Enter the dollar amount in the Claim Dependents Amount field for the child tax credit or other dependents.
• Step 4: Enter any specific dollar amounts for Other Income or Other Deductions the employee specified to reduce their withholding.
• Step 5: If the employee requested an additional flat amount to be withheld from each paycheck, enter it in the Extra Withholding Amount field.

Click SAVE to lock in the federal filing status.

Configuring State and Local Taxes To configure state taxes, click on the SIT name in the list. Here, you must confirm the employee’s Resident status for that state, their state-specific Marital Status, and any extra state withholding they requested.

If your employee is subject to a local city/county tax or a supplemental state tax, you must add it manually:

1. Click the New + icon at the top of the Taxes tab.
2. Select the specific tax from the Tax drop-down menu.
3. Depending on the tax selected, you may be prompted to select a specific Local Tax Authority or County from an additional drop-down menu. Complete the resident and marital status fields, and click SAVE.

Managing Tax Exemptions At the bottom of the Taxes tab is the Tax Exemptions grid, which lists all taxes your organization is subject to. If an employee is legally exempt from a specific tax, simply check the Exempt box next to that tax type. FastFund will automatically exclude their wages from that specific tax calculation during payroll processing. Best Practice: Always consult with a tax professional, your outside accountant, or the IRS before marking an employee as exempt from any payroll taxes.

Locking, Deleting, and Inactivating Taxes Data integrity is paramount in FastFund. Because of this, there are strict rules governing how you can modify taxes once they have been used:

• Exemption Lock: Once a tax has been used in a posted payroll batch for an employee, its Tax Exempt status checkbox will turn into a gray box and cannot be changed.
• Deleting vs. Inactivating: If a tax type has never been used in a payroll calculation for the employee, you can open the tax and click the DELETE button to remove it from their profile. However, if the tax has been used, the Delete button will be grayed out. If the employee is no longer subject to that tax (e.g., they moved to a state with no income tax), you must open the tax details, check the Inactive box, and click SAVE.