Why are federal taxes not being withheld from one of my employees? Local and state are coming out just fine.

Thanks for reaching out to us, Hytron.

Let me help you go over your payroll setup so we can identify why the federal taxes are not being withheld from your employee's paycheck in QuickBooks Online (QBO).

In some cases, you may notice 0.00 for federal or state withholding. Don't worry. It's normal if your employee claims exempt status or didn't earn enough to meet the minimum wage.

First off, you're required to obtain a federal W-4 from each of your employees. You'll have to check these forms to ensure they're correct. 

To understand the minimum threshold for federal withholding, please check out this link: IRS Publication 15-T.

Next, you can check your employee's tax setup in your payroll product. Ensure the filing status and all other relevant fields match those on your employee's W-4. 

If your employee's filing status is set to Exempt or Do not withhold, taxes won't be deducted from their paycheck. If this is a mistake, you can change their filing status to the correct one. 

Please read this article for more detailed information: Troubleshoot no income tax withheld from a paycheck.

In QBO, you can run payroll reports to generate information about what you've paid out. This way, you'll gain insights into your employees' wages and contributions, which is helpful during the filing of taxes.

You can always get back to us for any follow-up concerns about federal taxes. The Community is here to help anytime. Stay safe, and have a great day ahead!