As an employer you may be wondering what you need to do if you happen to hire an employee that lives in another state. This is a fairly common scenario if you live close to a state line and you want to be careful so that you don’t end up having to file amended returns.
Generally what you need to do is withhold state taxes where the employee lives and send that withholding to their home state. Some states do want you to withhold a non-resident tax so that is something that you will want to be aware of and plan accordingly.
Unemployment is taxed, on the other hand, based on where the employee actually works.
Using payroll software to help keep track of and separate these taxes can help alleviate the worry of making mistakes on your compliance forms.
Advanced Micro Solutions has been in business for over 25 years offering a complete solution of processing payroll from a small business wanting to process their own payroll, to a CPA firm processing payroll, W-2s, and 1099s for multiple clients, all the way to a dedicated payroll processing service.
Our 1099-Etc software package includes the ability to separate where an employee lives verses where they work to accommodate virtually any tax situation that may come up. We have a free DEMO to make sure that the software can meet your needs and provided live knowledgeable support via phone, chat, fax or email. Support is provided free of charge from 8 AM – 6 PM central Monday – Friday with extended and Saturday hours during January and April.
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