How to Apply Shadow/Highlights Adjustment Non-Destructively in Photoshop CC
Shadow/Highlights adjustment is located under Image > Adjustmets sub-menu. This wonderful command and dialog allows us to brighten shadows, darken highlights but also and to increase midtone contrast. Since this command is under Image menu many users does not expect to work with Smart Object layers. Surprise! It works with Smart Objects! This means you can apply adjustments non-destructively and change them at any time you want even after saving and document and reopening it (save document as PSD or layered TIFF).
Here are steps to apply Shadow/Highlights adjustment non-destructivelyStep 1 Convert layer with image to Smart Object
If you have only Background layer then just right/Command click on it and choose Convert to Smart Object. If you have multilayered file and want to apply Shadow/Highlights adjustment with already made changes then click on top layer in layers stack and press Ctrl/Cmd + Shift + Alt/Opt + E to merge all visible layers non-destructively. Convert merged layer to Smart Object using mentioned right/Cmd click or from Layer > Smart Objects > Convert to Smart Object. In case you want to merge only some of layers in layer stack then select them first and press Ctrl/Cmd + Alt/Opt + E to merge non-destructively only selected layers. Resulting merged layer will have (merged) in parenthesis.
Step 2 Apply Shadow/Highlights adjustment
With Smart Object layer selected go to Image > Adjustments > Shadow/Highlights.
Step 3 Save file as PSD or layerd TIFF
Advantage of Smart Objects is that applied transformation, filter or adjustment in this case can be hidden, changed or deleted at any time even after saving and reopening file. Requirement to use flexibility of Smart Objects is to save file as native PSD or layered TIFF file. If you want to save file in TIFF format then do not forget to ensure that Layers option is checked in Save or Save As dialog. Although it will be strange that Layers is unchecked, same recommendation applies and when saving as PSD file.
Step 4 Change settings for Shadow/Highlights adjustment
To change already applied settings just double click Shadow/Highlights below Smart Object thumbnail in Layers panel to reopen dialog with the same name. If you want to change blend mode or to lower Opacity slider without to change applied settings then double-click on opposite sided triangles which are located on the right side of Shadow/Highlights title below Smart Object thumb.