I'm not withholding state & federal tax for my employee (over 65). Why is it withholding it on the employer end?? How do I fix this in payroll?

My first question is why aren't you withholding federal and state taxes? An employee over 65 is still subject to taxes. 

Hi there, @perfectionautobo.

QuickBooks Online (QBO) calculates the federal withholding based on the information entered on your employee's W-4. Let's determine if your employee is subject to Federal withholding exemption.

Before we start, please know that employees over 65 are still subject to taxes, as stated by KathyS296.

Here are the factors considered in calculating your Federal and State Income Tax (FIT and SIT) amount:

• agency's wage and tax calculation table
• employee's filing status, number of allowances, or extra withholding amount in the employee setup
• pre-tax deduction items included on the paycheck
• changes in pay frequency
• creating a paycheck with wages that has lesser or larger amount than what the employee normally gets in a pay period

I'm adding these articles for more details: 

• FAQs on the 2020 Form W-4.
• What's changing with the Federal W-4?
• IRS Pub 15

However, if your employee is subject to an exemption, you'll want to make sure that the Federal filing status from the W-4 information is Exempt. Here's how:

1. Click Payroll from the left menu, then select Employees.
2. Select the appropriate employee from the list.
3. In the Pay section, click the pencil icon to edit.
4. Go to the What are your employee's withholding section, then click the pencil icon.
5. In the W-4 information, select Exempt from the Federal filing status field.
6. Click Done.

You can also read this article to learn more about payroll: Payroll 101.

Please know you can continue to reach me here with any additional questions. Thanks for coming to the Community, wishing you continued success.