How to mark an employee who lives/works in California as exempt from SDI, UI and ETT taxes?

Welcome to the Community,

Marking an employee as tax-exempt in QuickBooks Online (QBO) can be done by going to their details. Below are the steps on how:

1. In QBO, go to the Workers menu at the left pane to get to the Employees page. 
2. Pick the specific employee, then tick the Pencil (edit) icon beside Pay. 
3. In the What are (employee's name) withholdings? section, click the Pencil (edit) icon again.
4. Scroll down to the Tax Exemptions section and select the taxes he/she are exempt from on the drop-down.
5. Hit Done to complete.

To learn more about the process, consider checking out this article: Employee payroll tax exemptions.

Please let me know if you have any other questions or concerns, and I'll get back to you right away. I'm always here to assist. Have a good one!

Thanks for clarifying your version of QuickBooks, yang10827.

I'll be your guide on how to exempt your SDI, SUI and ETT taxes in QuickBooks Desktop. Below are the steps on how to do this:

1. Go to the Employees menu and select Employee Center.
2. Choose an employee.
3. Go to the Payroll Info tab.
4. Click the Taxes button.
   
5. Go to the State tab.
6. Uncheck the boxes for SUI and SDI.
   
7. Go to the Other tab.
8. Under Item Name, remove the Employee Training Tax item and click the Delete button.
   

The above steps will help you set your employees to be exempt for SDI, SUI and ETT taxes.

To give you more insight about setting up a tax exempt for employees in QuickBooks Desktop, feel free to visit this link.

I'm always right here whenever you need help, Take care and wish you all the best of luck!

When the options to remove SUI and/or SDI have checked boxes and are grayed out so that they can't be edited, what steps can be taken to access editing?

Hello @kelli333,

You can edit your employee's payroll item detail from the list of items. Let me show you how.

1. Go to Employees.
2. Select Manage Payroll Items.
3. Click View/Edit Payroll Item List.
4. Under Payroll Item List, select your SUI or SDI payroll items.
5. On the Payroll Item menu, select Edit Payroll Item.
6. Complete the changes you need to accomplish.
7. Click Finish.

Additionally, I've got you this helpful article for guidance in preparation for the 2020 tax season: QuickBooks Desktop Payroll Year-end Checklist.

If there's anything else that I can help you with, please let me know by leaving any comments below. I'll be here to lend a hand.