On the W4: The employee enters the number of dependents X $2,000. If he has 3 dependents, the employee will enter $6,000 on the W4. You will enter 3 in Quickbooks. Looking back on the thread, it seems impossible to get a good answer from QB. I set up an employee, entered 6,000 and had to pay him about $1,584 on a weekly basis to get it to deduct $2.00 in federal. I changed it to 3 in QB and it withheld the correct amount that matched the tax table from the IRS. QB does not make it very clear. Even the HELP button on that window does nothing.

Hope it helps.