Complicated multistate tax laws can confound even the most savvy employers. In the Learning Moment Video below, Payroll Tax Management's Vice President of Sales Summer Poletti explains what your company needs to do to stay in compliance and avoid costly penalties.
Navigating the Laws that Change from State to State
To help you navigate the patchwork of state and local laws that apply to your employees who cross state lines for work or perform work across multiple states, here are a few general rules:
- Many states have reciprocal agreements to ensure that employees who live in one state and work in a different state are not subjected to double tax withholding – check for these agreements to avoid overpaying taxes
- Since regulations vary from state to state, always check the laws in all states where your employees live and work
State Unemployment Insurance Laws
The regulations concerning state unemployment insurance and payroll taxes can be confusing. In some cases, they are paid to different states for the same employee.
- if your employee lives in one state and works in another, the home state receives the withholding taxes while the state unemployment insurance (SUI) is paid to the work state
- When an employee is temporarily working out of state, the SUI is due to the permanent work state
- For remote employees, the home office determines the work state
- When employees work in multiple states, SUI is paid to the state where the company's base of operations or corporate office is located
In addition to the video below, you can access our whitepaper on the topic here. For further information, click below to contact one of the multistate payroll tax experts at Payroll Tax Management.