Using Nonprofit Payroll Software to Manage Company Taxes

Business managers must familiarize themselves with nonprofit payroll software and tax rules before effectively managing an organization. Keep the following guidelines in mind if you are utilizing any payroll software at a nonprofit for the first time.

There are tax exemptions. Nonprofit organizations may not need to pay federal income taxes. The organization must also not seek any monetary or commercial profit.

Nonprofits have legal payroll responsibilities. Your nonprofit must take responsibility for its payroll taxes. The government will also hold your company liable for any Social Security and Medicare contributions.

You must submit annual reports. Nonprofits report the details of their business activities each year to retain their tax-exempt statuses.

Advanced Micro Solutions offers nonprofit payroll software to help organizations stay compliant. AMS is a one-stop software for numerous payroll and accounting needs. Reach out if you need help calculating federal, state, or local payroll taxes, or saving time as you submit your reports. We are proud to provide companies with user-friendly and cost-effective tools.



What Payroll Taxes Should Nonprofits Know About?

A nonprofit must pay certain taxes despite not needing to pay others. You will be responsible for knowing what your organization owes in payroll taxes, separate business income, and any other specific state and local taxes.

  • FICA – You must withhold a certain amount from your employee’s wages. This typically consists of Social Security and Medicare taxes.
  • State Income Tax – Nonprofit payroll software will help you withhold the taxes if your employee is not exempt from it. Your nonprofit will not need to withhold the state income tax if you live in a state like Texas or Florida.
  • Local Income Tax – Make sure to check any specific tax requirements in your city or state. The local requirements may differ, and certain localities will charge a separate tax. Determining how much you must withhold will keep your organization compliant with all governing bodies.
  • Workers Compensation – Nonprofits must comply with workers compensation laws in their state. The state will determine the workers comp rates based on a worker’s position and any claim history. Look for a nonprofit payroll service that offers a wide range of payroll reports.


AMS Tools for Nonprofits

Nonprofits who are starting out can use Advanced Micro Solutions’ easy payer and employee setup features. AMS shows different state and federal tax liabilities whenever you access the view command. Software users can also access a variety of payroll reports. Some of the most common payroll reports include those that businesses use for payer/tax summary, employee detail, and workers compensation.



Our accounting and payroll software works as an add-on module to AMS’ W-2/1099 forms Filer. The program supports businesses who prefer to run “live” or after-the-fact payroll. Your nonprofit can fill out a form to download our free demo file if you are still uncertain. The file should give you the necessary understanding of how to incorporate AMS’ tools for nonprofit payroll software. Contact AMS’ customer support with any questions by calling (405) 340-0697.

Software Solutions from AMS

Our W-2 and 1099 Forms Filer is our only required platform. From there, users pick the services they need. Choose from the tools below to build out your customized accounting software.