If My Business Is Located in One State and I Have Employees in Another State, What Are the Employment Tax Issues

A Tax FAQ with Mary E. Vandenack.

When you have employees in another state, you have to determine whether you have to pay and withhold income taxes on your employees in the other state. Many of the states have gotten very aggressive about charging for payroll taxes and claiming that if you have an employee in the state for even one day, that that employee is subject to employment taxes in that state. So it’s really important to get to know those rules so you can stay in compliance. Some states also have some specialized employment tax rules if you are sending an employee into another state for even a day. You are going to want to take a look at those rules.

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