Justworks Payroll: Employee Tax Withholding Information

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Employee Tax Details in Justworks Payroll

Employees can easily enter and edit their personal tax information through Justworks Payroll to ensure their withholdings are as accurate as possible. Below, you’ll find the details of how employees can manage their tax information from within their Justworks account.

Entering Tax Information

During their initial account setup, employees are prompted to enter their federal, state, and local tax information through the ‘Make your tax withholding selections’ task listed under the Your tasks section of their Home workspace.

Screenshot showing the 'Make your tax withholding selections' task for employees.

Once they’ve clicked into the task, they will see fields to enter and save their tax withholding details:

Screenshot showing the Tax withholding page that employees will need to complete.

Federal Tax Information

The first details an employee will be prompted to enter are their federal withholding settings. This information would be based on the most current version of the Form W-4. Employees can ensure that the information they enter is correct by consulting the Form W-4 instructions.

This information would include:

• Filing status
• Dependents claimed
• Other income
• Additional withholdings

State Tax Information

If applicable, employees will also be prompted to enter their state tax information. To do so, they should reference their state-specific withholding form. You can find each state’s form here:

Some states do not have their own withholding form, and instead default to the withholding settings requested through Form W-4. These states include: 

• Colorado
• New Mexico
• North Dakota
• Utah

An employee located in one of these states would not be required to enter state-specific tax information. If they ever needed to make changes to their state tax details, they could reach out to our team at support@payroll.justworks.com.

Other employees may not see a state-specific tax section because they are located in a state that does not take state income tax. These states include:

• Alaska
• Florida
• Nevada
• New Hampshire
• South Dakota
• Tennessee
• Texas
• Washington
• Wyoming

Employees located in Pennsylvania would also not have a state tax information section, as Pennsylvania applies a flat personal income tax.

State Reciprocity

If an employee works in one state, but lives in another state, they may be eligible for certain tax exemptions through state tax reciprocity. State tax reciprocity refers to agreements between two states that allow residents of one state to request exemption from state withholdings so that they’re only paying taxes to the state they live in.

Specifically, these states have reciprocity agreements in place:

• AZ: Reciprocity with CA, OR, IN and VA
• DC: Reciprocity with every other state
• IA: Reciprocity with IL
• IL: Reciprocity with IA, KY, MI and WI
• IN: Reciprocity with PA, KY, MI, OH and WI
• KY: Reciprocity with IL, IN, MI, WV and WI; also with VA and OH with conditions
• MD: Reciprocity with DC, PA, VA and WV
• MI: Reciprocity with IL, IN, KY, MN, OH and WI
• MN: Reciprocity with MI and ND
• MT: Reciprocity with ND
• ND: Reciprocity with MN and MT
• NJ: Reciprocity with PA
• OH: Reciprocity with IN, KY, WV, MI and PA
• PA: Reciprocity with IN, MD, VA, OH and WV
• VA: Reciprocity with DC, KY, MD, PA and WV
• WI: Reciprocity with IL, IN, MI and KY
• WV: Reciprocity with KY, MD, OH, PA and VA

If an employee is eligible for state tax reciprocity, they will need to reach out to their admin to set the state tax exemption in place for them by following the steps in the next section.

How to update employee withholding details as an Admin.

Admins can edit withholdings for a member by navigating to People > Relevant Employee’s Name > Tax information> Edit.

How to Set Up State Reciprocity in Justworks Payroll

To apply state reciprocity Exemptions, please reach out to us with supporting documentation and the member details.

FICA/ FUTA – Student, F-1/J-1 Visa Exemptions

To set FICA/ FUTA – Student, F-1/J-1 Visa Exemptions, please reach out to support with the following details:

• Employee Name

• Type of Exemption: (e.g., FICA Exemption – Student, F-1/J-1 Visa, State Tax Exemption, etc.)

• Effective Start Date

• Expiration Date

• Supporting Documentation: Please attach the applicable official documentation, such as a Form I-20, DS-2019, Form I-797C, or Form 8233. 

Parsonage Exemptions

For Parsonage exemptions, please forward a letter with the following details:

• Official Organization Letterhead: Name, logo, physical address, and contact information of the religious or educational institution.

• Date of Issue: The date the letter was drafted and issued.

• Employee Information: Full legal name of the employee receiving the exemption.

• Qualifying Role & Duties

• Exemption Status & Arrangement

• Approved Parsonage Amount/CapTax Responsibility & Liability Acknowledgement: A statement confirming the employee acknowledges responsibility for the accuracy of the housing figures and assumes any associated tax liabilities.

• Authorized Signatory: Signature, printed full name, and official title of an authorized administrator or representative of the organization.

Screenshot showing the 'Tax reciprocity' section within the Tax information tab of an employee's account.

Screenshot showing the box to check off for withholding taxes in an employee's home state.

Step 3: Once state reciprocity is enabled for an employee’s account, they will need to log into their account and complete the ‘Manage your tax withholdings selection’ task that will appear on the Home workspace. From there, they will be able to opt-in to state reciprocity.

Screenshot showing the 'Make your tax withholding selections' task on an employee's H.

Updating Tax Information

If an employee ever needs to update their tax information, they can make changes by navigating to the ‘Account Settings’ or 'Profile' tab of their Justworks Payroll account. From there, they can click on the ‘Finances’ tab on the left side of the page.

Screenshot showing the 'Finances' section within an employee's Account settings tab.

On the following page, they can click the ‘Edit’ button within the ‘Tax info’ section.

Screenshot showing the 'Tax info' section an employee will need to edit to update their tax withholding details.

From there, the employee will be able to update their withholding details and save changes. 

Screenshot showing the Tax withholding page an employee can review and edit.

Any updates made will go into effect for the next payroll. Please note that if the processing deadline has passed for the next upcoming payroll by the time these tax updates are saved, the updated withholdings will be applied to the following payroll.

Disclaimer

This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for accounting, legal or tax advice. If you have any legal or tax questions regarding this content or related issues, then you should consult with your professional legal or tax advisor.