Federal law mandating vacation time
Again, you withhold and remit state taxes for the state where the employee works.For the three months of training, you must withhold taxes for South Carolina even though the employee lives and primarily works in North Carolina.Let’s pretend your business is in Pennsylvania and you have an employee who works from home in Wyoming.Following the basic rules, you know you must withhold income taxes for Wyoming because that’s where the employee works.
Withhold state taxes for the state where the employee works.
Depending on the states and how long the employee is there, you might have to withhold taxes for the state where the employee is working, even if they’re only there for one day.
Check the state’s rules for specific details on how long an employee must temporarily work there before you start collecting taxes for the work state.
Using software that handles multi-state payroll can help.
Patriot’s online payroll software can handle taxes for your employees who work in different cities and states.