Use the Tax Location Code US - this assigns the Tax Profile (IT) International and only has Federal options.

Idion, I appreciate your response.  I don't have a US tax location code:

Hi Lonnie Thibodeaux

To get the US Tax Location Code you need to turn on the setting for 'Require Local Tax Reporting' in Payroll  Setup Options - Additional Panel.  (I know it doesn't sound right :-) ) Then US will show up as a tax location code.

Hope this helps

Elliott

Elliott,

Thanks for that info.  I set that option and yes now I have the US Tax Location.  I will do some testing with this next week.  Thanks again to both you and Idion for this information.  Will help greatly.

Just updating this thread.  The above response by @jepritch provide the solution. I was then able to create a Tax Profile (Code: IT), selected US for the Tax Location and left all the tax entities checked to apply US taxes only (Withholding, Social Security, Medicare).  Thanks @jepritch.

Ok, so along the lines of handling International Employees, I have another related situation, so I thought I would continue with it here.
This employee does not live in the US.  With the Tax Profile of IT we have set up, only US Federal taxes are being applied and calculated as expected...no State...as he does not live here.  So the next issue is, IRA tax rules state that the first $105,000 is not subject to Federal Withholding (it is subject to SS & Medicare). So what we were going to do was leave the existing IT Tax Profile with all the Federal Tax items checked. We would create a second code (IT2 for example), and set that code to calculate SS & Medicare only (no Fed Withholding) and assign that to the employee initially.  Then when the employee reaches the $105,000 threshold, we would change his tax profile to IT, which would calculate all Federal taxes (Withholding, SS, Medicare) on the income above $105,000.  Does anyone see a problem with this approach?