OP is asking about the NY state exclusion from preparer registration, which gets input into the Preparer Info screen under User Options. 04 is "employee of CPA."
You get that diagnostic when you enter something in the NYTPRIN field that isn't a NYTPRIN. If you're using exclusion code 04, you don't have an NYPRTIN. Leave that field blank.
LOL! Mind reading is my main superpower.
Also, a dozen years ago I had a NY client and I remembered the NY exclusion box. It only took a little poking around to force Lacerte to give me a diagnostic that seemed to match!