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Ed Johnson
Ed Johnson, Tax Preparer
Category: Tax
Satisfied Customers: 10760
Experience:  GPHR Cert; U.S. Treasury Tax Advocacy Panel appointee
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Tax

What does tax blocked mean?

I would have to know your status for sure.

However, in general, there are several categories of employees on whom tax would either be not collected or manually derived. When companies use automatic payroll systems, such as people soft, PayChecks, etc, they have to make an override entry to block taxes. It happens most often with regard to social security taxes under the following conditions:

1. A person has reached the maximum income for taking SS taxes

2. A person is subject to taxation of SS under totalization agreements due to an overseas assignment.

It also happens for income tax under these conditions:

1. A person is designated exempt for any reason including the filing of exempt with the employer on the W-2;

2. A person is on an assignment where they are being tax equalized

3. The max withholding for his annual income has already been reached in regard to paying estimated taxes

4. A person is a category of employee for whom withholding is not required by the employer.

5. your paycheck included payments that were not taxable income

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Question

My paycheck stub is marked tax blocked and no federal tax was withheld.

Submitted: 9 years ago.
Category: Tax
replied 9 years ago.

I would have to know your status for sure.

However, in general, there are several categories of employees on whom tax would either be not collected or manually derived. When companies use automatic payroll systems, such as people soft, PayChecks, etc, they have to make an override entry to block taxes. It happens most often with regard to social security taxes under the following conditions:

1. A person has reached the maximum income for taking SS taxes

2. A person is subject to taxation of SS under totalization agreements due to an overseas assignment.

It also happens for income tax under these conditions:

1. A person is designated exempt for any reason including the filing of exempt with the employer on the W-2;

2. A person is on an assignment where they are being tax equalized

3. The max withholding for his annual income has already been reached in regard to paying estimated taxes

4. A person is a category of employee for whom withholding is not required by the employer.

5. your paycheck included payments that were not taxable income

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