Exempt payments include QuickBooks payroll items with certain tax tracking types and any payroll item set to calculate before FUTA withholding. QuickBooks includes the amount for that payroll item in the Exempt Payments total on your Form 940.
To verify the exempt payment amounts on your Form 940, do the following:
Run a Payroll Item Listing report to see the tax tracking types assigned to your payroll items in QuickBooks.
Run a Payroll Summary report for the Form 940 filing period and note the amounts for the payroll items with the matching tax tracking types.