To whom it may concern,

how do I set up an employee that claims exempt on federal and state income tax

Are you using ezPaycheck 2017 now. Please follow this guide to set up the employee. In step 3.3, you can uncheck federal and state income tax options.
http://www.halfpricesoft...oftware/add-employee.asp 

If you have both W2 employees and 1099 contractors in your company, you can follow this guide also.
http://www.halfpricesoft...nd-1099-Contractors.aspx 


Please feel free to contact us if you still have any questions.

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