What if the employee is exempt from Federal and State withholdings and their pay code is inactive?
If the 941 Federal Tax Amount does not match the Pay Code Transaction Amount or the Employee Tax Summary Amount, check to see if there's a pay code at the employee level (Payroll > Employees > Modify Existing Employees) that is set to do not calculate. When an employee pay code is set to do not calculate, the 941 Report will exclude it from the report. You need to change the ARP type to calculate a zero amount so the employee pay code will be included in the 941 Report.
Do this...
1. Open Payroll > Employees > Modify Existing Employees.
2. Click to select the Pay Codes tab and then double-click on the pay code that is showing on the 941 Report.
This screenshot shows the FWT pay code as an example. To edit a SWT pay code, substitute the SWT pay code for the FWT pay code. Double-clicking any pay code will open the pay code screen in edit mode so you can view the ARP type.
3. On the Employee tab, check the ARP Type.
ARP Type is set to Do Not Calculate on an employee pay code
If the employee pay code is set to do not calculate, you'll need to change the ARP Type to amount and enter 0 (zero) as the Amount.
Why switch the ARP type to Amount? Switching the ARP Type to Amount and calculating a zero amount will not cause any errors... if the employee's pay code has been set to do not calculate for the entire calendar year. Switching the ARP Type to Amount and calculating a zero amount WILL allow the amount to show on the 941 Report.
4. Click Save (CTRL+S).
When you run the 941 Report, it will include the employee pay code.
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