Tax Method X or Y Statutory or Tax Method 2 or 3 Non Statutory - What Is the Difference and How Doe

 I am trying to determine what is the best approach for setting up an employee who indicates they are exempt from taxes on their W4.  This is what I have figured out so far using only Federal A for example:

1. If you set up an employee with a Tax Override or Federal A with a FT = F for Flat, then JDE calculates Taxable Wages for Federal A and no Tax and when the W2 Year End Workbench is run, it marks the W2 in Box 13 as Statutory Exempt.  This if for regular pay only.  If the employee has supplemental pay, the system ignores the Tax Override and taxes the employee.