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This 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 what taxes to be on the lookout for including state income tax, disability insurance, unemployment insurance, and the various local taxes. From this point we 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 then discuss how to determine if the company is an employer in the state and therefore required to withhold or pay taxes.

Next we work through the definitions of resident and nonresident and how that affects the withholding or payment of taxes by the company. 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 begin to 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 discussion also includes other forms that would need to be completed including nonresident 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 it is imperative that the employees’ wages 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 conclude the course with a discussion of how to determine which state to pay SUI or state unemployment insurance to when an employee lives and works in two or more states.

Learning Objectives

  • 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
  • Discover how to determine state withholding liability
  • Recognize the difference between a resident and a nonresident of a state and how that affects state income tax withholding
  • 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
  • Identify which states follow the Internal Revenue Code and which version
  • Explore the requirements for reporting wages for multistate employees on Form W-2
  • Identify the four factors that are used to determine state unemployment insurance liability
  • Identify the states that have reciprocal agreements and explore how those agreements affect taxation

 

 

Last updated/reviewed: June 04, 2018

6 Reviews (43 ratings)Reviews

5
Anonymous Author
The course contains many of the multi-state payroll issues. The payroll website provided at the end is a very useful resource. I will definitely refer to the website next time I have payroll tax question.
4
Member's Profile
it's great materials and resources, it's easy to understand and hope more quiz with explain will be much helpful.
4
Anonymous Author
Useful information presented in a straightforward manner that is easy to follow and understand.
5
Member's Profile
Very good class, state taxation is very complex today and need to ensure we do it right.
4
Member's Profile
There's not a lot of info in this area so I'm glad this course was available!
5
Member's Profile
An excellent, detailed presentation of multistate tax laws and regulations.

Prerequisites

Course Complexity: Advanced

No Advanced Preparation or Prerequisites are needed for this course.

Education Provider Information

Company:
Illumeo, Inc., 75 East Santa Clara St., Suite 1215, San Jose, CA 95113
Contact:
For more information regarding this course, including complaint and cancellation policies, please contact our offices at (408) 400- 3993 or send an e-mail to .
Course Syllabus
INTRODUCTION AND OVERVIEW
  6:46Introduction to Multistate Employees
What Tax?
  7:42What Taxes?
  10:24Taxes Could Include.....
  8:28Are You An Employer
Which State?
  11:19NY, NJ, CT, and Telecommuting
  13:46Are There Any Agreements
  7:10Are Any Forms Needed
  7:00How Much to Which State?
  4:38How Do I Report?
  10:39Who Gets The SUI?
CONCLUSION
  7:43Is There Anything Else?
Continuous Play
  1:35:34Which State? What Tax? How to Handle Multistate Employees Correctly
SUPPORTING MATERIALS
  PDFSlides: How to Handle Multistate Employees Correctly
  PDFHow to Handle Multistate Employees Correctly Glossary/Index
REVIEW and TEST
  quizREVIEW QUESTIONS
 examFINAL EXAM