Multiple State Payroll

[Tax Bird]

I have a client who employs people from different States to work across the country.

I'm thinking that in this situation the best thing to do would be to set up the State portion of the employees' withholding as the employees' home State. Does anyone know, in general, ....

1. If one can choose withholding by home State vs Work State?

2. If the company can set up a payroll account with the respective States without having to first obtain Authority to Operate in that State?

Seems to me you can in both scenarios but I wanted to run it by you guys to see what you thought.

Any advice would be greatly appreciated.

Thank you in advance.

[kcjenkins]

I am certain that you are supposed to withhold by work state, not home state. Otherwise the work state could be ignored, and that is something that no state will accept.

For the second, some states may require it, many do not. You just have to ask the state involved, and they will happily tell you what they require.

[Tax Bird]

I am certain that you are supposed to withhold by work state, not home state. Otherwise the work state could be ignored, and that is something that no state will accept.

For the second, some states may require it, many do not. You just have to ask the state involved, and they will happily tell you what they require.

See, now I recall a client of mine (who uses a 'national' payroll service) withholding based on home state for someone who worked just across the border in a neighboring State. Maybe a reciprocity agreement between the States made this possible.

In any case, I'm off to research the State specific requirements.

Thank you for your response.

[Daune/CA]

Isn't that what the State 1 & State 2 are for on the W-2, where you withhold for work state and residence state providing both hv income tax?

[Tax Bird]

Isn't that what the State 1 & State 2 are for on the W-2, where you withhold for work state and residence state providing both hv income tax?

Not necessarily.

After I posted yesterday I found a great refernce on Multi State payroll issues.

If I did it right, the file should be attached.

MultiState_Payroll_Issues.pdf

[kcjenkins]

That is a good link. Thanks for sharing it with us.

[BulldogTom]

Not necessarily.

After I posted yesterday I found a great refernce on Multi State payroll issues.

If I did it right, the file should be attached.

Thanks for sharing. I saved that file. Never know when that issue might come up.

Tom

Lodi, Ca

[Lion EA]

Thank you :D