Multijurisdictional Payroll Issues: Withholding, Unemployment, and Registration Obligations for Multistate Businesses

This webinar will cover state requirements for payroll withholding, state unemployment insurance, and registration for companies with employees located in or working in other states. Our knowledgeable panel of state and local income tax advisers will review the requirements in specific states, including reciprocity agreements, and provide guidance to facilitate these filings.

For businesses operating in multiple states, determining payroll reporting and withholding obligations is particularly complex. The current work-from-home environment has created similar issues for most companies. Businesses are often required to collect and remit nonresident income taxes from employees. However, state guidelines for treating nonresidents vary. Additionally, many states have "convenience of employer" rules, or reciprocal agreements with neighboring states regarding withholding taxes when an employee resides in one state but works in another. Under employer rules, an employee may be subject to withholding if working from home is their choice, rather than required by their employer.

Further complicating payroll issues for multistate businesses is determining the proper state for reporting and remitting unemployment contributions. The Department of Labor provides four tests for determining the appropriate state. These are (1) localization of services, (2) base of operations, (3) direction and control, and (4) residence. The tests must be applied in chronological order. Even more challenging than reporting and remitting various payroll taxes to multiple states is determining where these obligations exist. 

Listen as our panel of SALT experts explains multistate payroll tax determinations for businesses operating in more than one state and best practices for their advisers.