Some companies are exempt from certain taxes and are not required by law to contribute to them through payroll. As an accountant, you can manage your client’s tax status and liability.
Important: You are responsible for the accuracy of a tax exemption you set for a client. If your client is liable for a tax and you set an exemption in error and your client receives a notice for a missed or late payment or filing, the resulting penalties and interest are the client's responsibility. Always confirm liability with the agency before setting an exemption.
If you need to change a client's SUI tax rate, follow the steps in this article.
Click the Clients section and select the client's name to view client details.
On the client details page, click Taxes.
On this summary page, view all taxes, the type of tax, and the current tax liability.
Click the tax name to view details, including tax history.
Click the Clients section and select the client's name to view client details.
On the client details page, click Taxes.
Next to the tax, click Edit liability.
After entering why the company is exempt, what upcoming quarter this applies to, and the exemption confirmation, click Change to exempt.
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 to let them know about the change.
As a result of this action, no wages will be reported as subject to this tax, meaning Gusto will not 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.
Click the Clients section and select the client's name to view client details.
On the client details page, click Taxes.
Next to the tax, click Edit liability.
After entering why the company is exempt, what upcoming quarter this applies to, and the exemption confirmation, click Change to liable.
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 to let them know about the change.
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.
Click the Clients section and select the client's name to view client details.
On the client details page, click Taxes.
Next to the tax, click Cancel current liability.
Click Cancel current change to confirm.
Once completed, view the updated status on the Taxes page.
If a tax status change is scheduled for a future quarter, you can still update it before it takes effect. Changes scheduled for the current quarter cannot be updated, only cancelled.
Note: When you edit a client’s tax liability, Gusto will email your client to let them know about the change.
Click the Clients section and select the client's name to view client details.
On the client details page, click Taxes.
Next to the tax, click Cancel current liability to cancel the scheduled change.
Follow the steps to set up a new change with the updated details for the future quarter.
If you need to update tax exemptions or liabilities for a previous quarter, contact us from the Help section of your account. Make sure to let us know the following:
Name of the customer.
Name of the exempt tax.
The actual effective date for the tax exemption.
Reason for the tax exemption and supporting documentation.