(Figure 1) Go to Setup > Payroll settings > Payroll categories
1 - The Tax Exemption Pay category will be obsolete after this upgrade (Figure 1)
(Figure 2)
2 - Make Income tax (federal or state) pay category active on employee master pay card: from the top menu go to Employees > master pay card > select employee > go to Taxes tab > click on the pay category > place a checkmark in the ”Active” check box (Figure 2). The pay category will be now active. Click on the check mark button to save the changes.
(Figure 3)
3 - Make Tax exemption pay category inactive on employee master paycard. From the top menu go to Employees > master pay card > select employee > go to “Taxes” tab and locate the Tax exemption category. Then uncheck the “Active” checkbox (Figure 3). The pay category will be now inactive. Save the changes.
(Figure 4)
4 - Once Tax exempt pay category was deactivated review the Employee taxation information. From the top menu go to Employees > Taxation information > Select employee > Detail tab > Place a checkmark in the “Exempt” checkbox. If is Federal exempt place a checkmark in the Exempt checkbox in the Federal section (Figure 4). If is Exempt in a different state place a checkmark in the Exempt checkbox in the specific state.