Employee tax withholding was a challenging task for many employers, even before the COVID-19 pandemic which sharply increased the number of remote workers and introduced numerous new tax nexus considerations. With each state maintaining its guidance on if and how telecommuters create a tax nexus for their employers, organizations have had to stay on top of numerous differing and evolving locality tax regulations, before ensuring proper management of tax withholding for affected workers. 

This online IRS-approved course discusses the handling of state taxes when an employee lives in one state and works in another, or works in two or more states simultaneously. 

We start with taxes that should be on the lookout for including state income tax, disability insurance, unemployment insurance, and the various local taxes. From this point in this online course, we will discuss the conformity with the Internal Revenue Code for the states as well as the proper handling of supplemental taxation. Working with these basics we will discuss how to determine if the company is an employer in the state and therefore required to withhold or pay taxes. We then work through the definitions of resident and non-resident and how that affects the withholding or payment of taxes. But the proper withholding of taxes also depends on whether or not there are any agreements between the various states in question so at this point we will discuss reciprocal agreements and how they affect the withholding of state income tax. To ensure proper tax withholding we briefly discuss employee withholding certificates or what is commonly known as the Form W-4 equivalent for the states.

This online course also includes other forms that would need to be completed including non-resident forms and military spouse exemption forms. From this point, we concentrate on how to determine the taxable wages for each date if the employee works in two or more states. We discuss the three methods available for the allocation of wages. Withholding of taxes is not the only compliance issue when it comes to multistate employees because the employees’ wages must be reported correctly. 

We work through examples of how to report on Form W-2 for an employee who lives in one state and works in three separate states. Income tax withholding however is not the only tax that needs to be determined when handling multistate taxation, the state unemployment insurance must also be determined. 

We discuss how to determine which state to pay SUI or state unemployment insurance to when an employee lives and works in two or more states. And finally, we conclude the course with a discussion of other areas that are affected by an employee working in more than one state, namely, wage and hour law and garnishments.

Learning Objectives:-

• To explore the various taxes required by different states including income tax, disability insurance, and the plethora of local taxes that may apply to wages paid
• To discover how to determine state withholding liability 
• To contrast the difference between a resident and a non-resident of a state and how that affects state income tax withholding
• To explore which states require the use of their own Withholding Allowance Certificate and which state allows either theirs or the Form W-4 to be used and which states do not have a form
• To identify which states, follow the Internal Revenue Code and which version
• To explore the requirements for reporting wages for multistate employees on Form W-2
• To identify the four factors that are used to determine state unemployment insurance liability
• To identify the states that have reciprocal agreements and explore how those agreements affect the taxation

Areas Covered:-

• Handling of state taxes when an employee lives in one state and works in another.
• Handling of supplemental taxation.
• Reciprocal agreements and how they affect the withholding of state income tax.
• Form W-4 and W-2
• Non-resident forms and military spouse exemption forms
• SUI or state unemployment insurance

Who Should Attend:-

• Annual Filing Season Program
• California Registered Tax Professional
• Certified Management Accountant
• Certified Public Accountant
• CPA (Industry)
• CPA - Small Firm
• CPA in Business
• Enrolled Agent
• Maryland Tax Preparers
• Oregon Tax Preparers
• Tax Accountant (Industry)
• Tax Attorney
• Tax Director (Industry)
• Tax Firm
• Tax Managers
• Tax Practitioners
• Tax Preparer
• Tax Professionals
• Tax Pros
• Trust & Estate Tax Professional
• Young CPA