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How to Edit Tax Withholding for Your Employees
How to Edit Tax Withholding for Your Employees

Need to edit your employee's tax withholding? No problem!

Jeffrey Mo avatar
Written by Jeffrey Mo
Updated over a week ago

You can edit tax withholding for your employees in their employee profile, or you can direct them to make the changes themselves.


Edit tax withholding for an employee

  1. Log in to Fingercheck as an Administrator.

  2. Click the EMPLOYEES tab.

  3. Click the employee's name or number to open their profile.

  4. Click Payroll > Taxes.

  5. Click the Edit icon (pencil) next for any of the taxes.

  6. In the pop-up window that appears, make the necessary changes.

    In the following example, the employee wants to deduct an additional $100 for Federal taxes from each paycheck. Additional Type is set to Amount, and Additional Amount is set to 100.00. Alternatively, you can select Percent from Additional Type to deduct a percentage of the gross pay.

  7. Click Save.

  8. If you edited an Exemptions field (for state taxes), click OK in the confirmation pop-up window to apply the change to all the tax codes for that employee.


How to handle states with reciprocal agreements

If you live in one state but you work in another, you usually have to file an tax return in both states. But some states have reciprocal agreements. The following procedure describes how to set the proper tax configuration for an employee in Fingercheck. For more information, see Overview: State Payroll Taxes and https://taxfoundation.org/tax-basics/tax-reciprocity-agreement.

  1. Log in to Fingercheck as an Administrator.

  2. Go to the EMPLOYEES tab, and open the profile of the employee.

  3. Go to Payroll > Taxes.

  4. Click the Edit icon (pencil) for the State withholding (for example, New York).

  5. In the Edit Employee Tax Code dialog box, complete the fields as needed.

    Do not select the Is Resident checkbox if the employee is not a resident of the state (but works in the state).
    From the Reciprocity drop-down list, select one of the following options:

    • Both (the default): The employee lives in state A and works in state B. The full amount of state taxes will be withheld from the employees check for BOTH states.

    • Worked: The employee lives in state A and works in state B. The full amount of state taxes will be withheld from the employees check for state B, where the employee works. No state taxes will be withheld for state A, where the employee lives.

    • Lived: The employee lives in state A and works in state B. The full amount of state taxes will be withheld from the employees check for state A, where the employee lives. No state taxes will be withheld for state B, where the employee works.

    • Difference: The employee lives in state A and works in state B. State A has a higher tax rate than state B. The full amount of state taxes will be withheld from the employees check for state B, where the employee works. The difference of the higher amount from the lesser amount will also be withheld from the employees check for state A, where the employee lives.

  6. Click Save.


An example of reciprocity

When an employee works in New Jersey, and lives in New York, they will pay New Jersey taxes because that’s where they work. However, since New York has higher taxes they can choose to pay the difference to New York so they don’t owe as much at the end of the year. This can be enabled at the employer’s request.

This does not need to be done the other way around because New York taxes are higher than NJ. Since taxes are based on where you work, you will pay New York taxes and get a credit towards your New Jersey taxes when you file your return.

Note: If the employee lives in New York city, you will want to add New York city Local tax to their profile as well. You do not need to change any settings to this tax code as it is separate from NY state.


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