Manage a client's tax exemptions

Some companies may be exempt from a certain tax, and therefore are not required by law to contribute to this tax through payroll. As an accountant, you have the ability to manage your client’s tax status and liability. Follow the steps below to learn how to make these changes on your client’s behalf. 

View a client’s tax liability:

  1. Sign in to your accountant dashboard.
  2. Go to the Clients section.
  3. Click the client's name to view client details.
  4. On the client details page, click Taxes
    • On this summary page, view all taxes, the type of tax, and the current tax liability. 
  5. Click the tax name to view details, including tax history. 

Change a client’s tax status from “liable” to “exempt” for a current or upcoming quarter:

  1. Sign in to your accountant dashboard.
  2. Go to the Clients section.
  3. Click the client's name to view client details.
  4. On the client details page, click Taxes
  5. Click the action menu next to the tax and select Edit liability.
  6. After entering why the company is exempt, what upcoming quarter this applies to and exemption confirmation, click Change to exempt
  7. Once completed, view the upcoming change and date on the Taxes page.

As a result of this action, no wages will be reported as subject to this tax, meaning Gusto won’t file any quarterly tax reports for this tax. If a previously run payroll needs to be reconciled to reflect the exemption change, Gusto will follow up with you by email (and not your client). We'll check to see how taxes are impacted for payrolls already run in the selected quarter, and refund or debit your account if we need to. We'll email you if that happens. In the meantime, your tax exemption change is active for any future payrolls you run.

Change a client’s tax status from “exempt” to “liable” for a current or an upcoming quarter:

  1. Sign in to your accountant dashboard.
  2. Go to the Clients section.
  3. Click the client's name to view client details.
  4. On the client details page, click Taxes.
  5. Click the action menu next to the tax and select Edit liability.
  6. After entering why the company is exempt, what upcoming quarter this applies to and exemption confirmation, click Change to liable
  7. Once completed, view the upcoming change and date on the Taxes page. 

As a result of this action, wages will be reported as subject to this tax and Gusto will file the corresponding quarterly tax reports for this tax. If a previously run payroll needs to be reconciled to reflect the exemption change, Gusto will follow up with you by email (and not your client). We'll check to see how taxes are impacted for payrolls already run in the selected quarter, and refund or debit your account if we need to. We'll email you if that happens. In the meantime, your tax exemption change is active for any future payrolls you run.

Cancel a client’s upcoming tax status change for a current or an upcoming quarter:

  1. Sign in to your accountant dashboard.
  2. Go to the Clients section.
  3. Click the client's name to view client details.
  4. On the client details page, click Taxes.
  5. Click the action menu next to the tax and select Cancel upcoming change.
  6. Click Cancel upcoming change to confirm the selection.
  7. Once completed, view the updated status on the Taxes page. 

Update a client’s upcoming tax status change for the current quarter: 

  1. Sign in to your accountant dashboard.
  2. Go to the Clients section.
  3. Click the client's name to view client details.
  4. On the client details page, click Taxes.
  5. Click the action menu next to the tax and select Update upcoming change.
  6. Update why the company is exempt, what upcoming quarter this applies to, exemption confirmation, and then click Update
  7. Once completed, view the upcoming change and date on the Taxes page. 

Note: When you edit a client’s tax liability, Gusto will email your client informing them of the change. 

To update a client’s upcoming tax status change to a future quarter, cancel the change and create a new change for the future quarter.

If you need to update tax exemptions or liabilities for a previous quarter, contact our team at [email protected] for assistance. Make sure to let us know the following: