Quickbook Desktop and Changing Employee Tax Withholdings

Thank you for posting here in the Community, @amyyea. 

I'll guide you on how you can see the option to exempt your employee from state/federal tax.

You can select None to exempt your employee from any state withholding. On the other hand, you can choose Don't Withhold to make an exemption to federal taxes.

The option to exempt an employee with a tax withholding is through their profile. Let me show you how:

1. Go to the Employees menu, click Employee Center. 
2. Double-click on the employee's name.
3. From the left menu of the Edit Employee window, select Payroll Info.
4. Click Taxes from the right portion of the window.
5. Under the Federal tab, you can choose Don't Withhold in the Filing Status drop-down.
6. Go to the State tab and do the same thing. 
7. Click OK then OK again to save the changes. 

These changes will take effect on future payrolls since QuickBooks doesn't retract. You can check out this article on how we calculate employee taxes. 

For more details about making a tax exemption in QuickBooks Desktop, check out this great resource:

• Learn how to set up tax-exempt employees in QuickBooks Desktop Payroll.

If you have any other questions about payroll and employee setup, please let me know by adding a comment below. I'm more than happy to help. Keep safe!