how do you input an exempt from withholding employee in QB 2003?

I haven't tried this in QuickBooks, but most of the times entering a high number like 99 for exemptions will do the trick. Let me know if this works.

How did you set up your employee information? When you enter a new employee, it will ask you what the filing status is, ex: Single - 0, Married-5, or whatever. The higher the number of exemptions, the less is deducted from the paycheck. You should have a copy of the W-4 with this information on it that the employee has filled out and turned into HR.