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ezPaycheck Troubleshooting: Federal Income Tax Issue

ezPaycheck payroll software makes it easy to calculate federal and state payroll tax.

Issue #1: Federal Income Tax Is $0

Two reason can caused the such issue:

1. The employee's income is not high enough to withhold federal income tax or this employee claimed high number of exemptions
You can test it easily by increasing the payment.

2. On employee set up screen, the "federal income tax" option is unchecked by mistake. You can edit employee tax option to solve this issue.



Issue #2: Wrong Federal Tax Calculation

1. If one employee claimed high number of allowance, it will lower federal income tax.

2. Such issue may be caused by pre-tax deduction. When you generate a paycheck, you can view the summary part. If the Taxable Income is lower than the Gross Income, that means you set up some deduction that is exempt from federal and state taxes.



Solution:You can review each dedution details. If the deduction is set up to be exempt from federal and state tax by mistake, please change the option. After you delete the wrong paycheck, you add new paycheck. You will see the correc federal and state tax amount.



Issue #3: The W4 option change

IRS published the new 2020 Version W-4 with major change: allowances are no longer used for the redesigned Form W-4. All new employees first paid after 2019 must use the redesigned form. Your employees may see more or less federal tax if they change W4 option.

You will see the W4 option when you add/edit an employee's settings.



If you like to calculate federal tax manually, here are the steps:

  • How to Calculate 2020 Federal Income Withhold Manually with New 2020 W4 form

  • How to Calculate 2020 Federal Income Withhold Manually with 2019 and Earlier W4 form


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    ezPaycheck payroll software has been trusted by thousands of successful businesses for more than one decade. It helps you process payroll taxes, print paychecks and file tax forms easily and smoothly.

    If you have not installed this software, you can download and try it free for 30 days with no obligation and no credit card needed. ezPaycheck is available for both Windows and Mac computers.

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    Related Links:

  • How to Calculate 2020 Federal Income Withhold Manually (with 2019 and Earlier W4 form)

  • How to Calculate 2020 Federal Income Withhold Manually with New 2020 W4 form

  • Why the social security tax is not correct

  • Why the state income tax is not correct

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