Payroll Tax Issues for Multi-State Businesses: Fundamentals and Best Practices for Handling Multi-State Employees in 2019

OVERVIEW

This payroll training will offer participants an understanding of the employee payroll tax and compliance implications of conducting business within a state. The webinar will also help in optimizing the payroll management system by determining which state(s) to withhold for when states that have reciprocal agreements or no state income tax are involved.

There are significant payroll compliance issues for employers when employees cross state lines in the course of employment. Frequently, multi-state employment issues arise when the employer has business locations in more than one state. However, issues also arise when individual employees perform services in more than one state, live in one state and work in another, move from one state to another, or telecommute across state lines.

Compliance issues directly related to the payroll process include identification of the states for which the business is liable for the collection and payment of income tax, and compliance with the rules for each state regarding tax collection, payment and reporting. In addition, special rules are used to establish the state that is to receive the unemployment tax for a particular employee.

A very significant non-payroll issue is whether the employment creates nexus, i.e. a business presence, within a particular state and whether the employer is subject to that state’s income, franchise, sales and use, or other state business taxes imposed by the state and the related apportionment issues.

WHY SHOULD YOU ATTEND

Creation of nexus in a new state or local tax jurisdiction creates tax and compliance issues for a business such as liability of business income, franchise, property, sale taxes, employment taxes, and apportionment, and reporting compliance issues. Employers can inadvertently create nexus when employees work within a taxing jurisdiction.

Failure to properly withhold or pay taxes to the appropriate jurisdiction can lead to fines and penalties as well as employer liability and possible personal liability of employer officers and managers for under withheld employee taxes. Correcting errors after the fact can be an expensive and time consuming process.

Employers must exercise due diligence in obtaining and documenting the information used to compute employee withholding in order to avoid penalties for withholding or reporting errors or missing information. This webinar on payroll compliance will provide you with information on required documentation and ways to avoid problems and penalties.

AREAS COVERED

• Reciprocal agreements and how they affect state income tax withholding
• Employee domicile and tax residency
• State and local withholding certificates - when the federal W-4 isn't enough
• How to handle multi-state payroll processing when employees work in several states
• Fringe benefit taxation — which states differ from federal rules
• The employee payroll tax implications of conducting business in a state
• How to determine the states for which you must withhold tax
• Special rules for military spouses SUTA dumping — what it is and how to avoid this penalty trap
• Which states get withholding tax proceeds when employees work in multiple state
• Telecommuting

LEARNING OBJECTIVES

• Understand nexus and how employment within a state may create nexus for an employer
• Determine which state(s) to withhold for when employees work in multiple states under the general rule
• Understand the employee payroll tax and compliance implications of conducting business within a state
• Determine which state(s) to withhold for when states that have reciprocal agreements or no state income tax are involved
• Determine which state is the federal unemployment tax state when an employee works in more than one state
• Understand that state rules differ with regard to taxable income, withholding thresholds, wage reporting and fringe benefits
• Know when state or local withholding certificates or certificates of non-residency are required
• Learn how to avoid failure to withhold penalties

WHO WILL BENEFIT

• Payroll Supervisors and Personnel
• Payroll Consultants
• Payroll Service Providers
• Public Accountants
• Internal Auditors
• Tax Compliance Officers
• Enrolled Agents
• Employee Benefits Administrators
• Officers and Managers with Payroll or Tax Compliance Oversight
• Company/Business Owners
• Managers/Supervisors
• Public Agency Managers
• Audit and Compliance Personnel /Risk Managers