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barbara4
Level 1

How do I make an employee exempt from withholdings on QuickBooks?

How do I set up an employee as exempt from withholdings only?  I don't see where I can mark the employee as exempt.

Solved
Best answer December 10, 2018

Best Answers
Anonymous
Not applicable

How do I make an employee exempt from withholdings on QuickBooks?

Pick Don't Withhold under the federal and/or state tabs of the tax set up.

View solution in original post

8 Comments
Anonymous
Not applicable

How do I make an employee exempt from withholdings on QuickBooks?

Pick Don't Withhold under the federal and/or state tabs of the tax set up.

View solution in original post

kate11172002
Level 1

How do I make an employee exempt from withholdings on QuickBooks?

hi , 

where is this section in quickbook , i can not find it 

Catherine_B
QuickBooks Team

How do I make an employee exempt from withholdings on QuickBooks?

I can show you the easy steps, kate11172002. 

 

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 select 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 to future payrolls since QuickBooks don't retroact. You can check out this article on how we calculate employee taxes

 

Let me know if you need more help. Take care!

keithmyer
Level 1

How do I make an employee exempt from withholdings on QuickBooks?

I have no option under state taxes to select exempt. It just has the drop down to select which state 

keithmyer
Level 1

How do I make an employee exempt from withholdings on QuickBooks?

It does not give option under state to select exempt. It only has state selection

BettyJaneB
QuickBooks Team

How do I make an employee exempt from withholdings on QuickBooks?

It's good to see you here in the Community, @keithmyer.

 

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

 

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

 

Please see the sample snips attached on where to click it based on the steps shared above:

 

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.

 

Know that you can always get back to me here in the Community if you have any other questions. I'll be around to lend a helping hand. Keep safe!

km121
Level 1

How do I make an employee exempt from withholdings on QuickBooks?

Thanks for the help. However, when I choose none under the state, quickbooks does not allow me to choose this option. A message appears that says I must choose a state. My employees are exempt from Unemployment tax because we have fewer that 4 employees and hence the state does not allow us to register for unemployment. 

Angelyn_T
QuickBooks Team

How do I make an employee exempt from withholdings on QuickBooks?

Hi, @km121.

 

You must be able to select the None option for the State Subject t Withholding as shown by BettyJaneB above. If the system doesn't allow you to select that option, you can perform some basic troubleshooting steps to isolate the issue. I'm here to guide you how.

 

First, I recommend updating your QuickBooks Desktop to the latest release to keep your software up to date and get the latest features and fixes.

 

Here's how:

 

  1. Go to the Help menu and select Update QuickBooks Desktop.
  2. Switch to the Update Now tab. You can select the Reset Update checkbox to clear all previous update downloads.
  3. Select Get Updates to start the download.
  4. When the download finishes, restart QuickBooks.
  5. When prompted, accept the option to install the new release.

 

Once done, download the latest tax table update to stay compliant with the paycheck or payroll setup and calculations. You can use this article as your guide: Get the latest payroll tax table update.

 

Moreover, you can open the topics from this link for more hints about QuickBooks and payroll: Find QuickBooks help articles, Community discussions with other QuickBooks users, video tutorials, a....

 

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!

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