Charles Read, CPA, USTCP, IRSAC
President/CEO GetPayroll
Find me on LinkedIn
A recent survey by GoodHire found a whopping 68% of Americans would choose remote working options over in-office work. Remote work is here to stay and as an employer, you need to be aware of tax compliance issues, with multi-state payroll.A payroll tax nexus with another state, a connection between your business and the taxing authority (or authorities), can be triggered when your remote employee is based in a different state from the state your office is located in. Having just one employee based in a state is often enough to count as your company has a physical presence in that state. A payroll tax nexus opens you up to tax obligations, filing requirements, and other compliance issues you may not be aware of, especially if you don’t realize your new hire means your business is now operating across state lines.Things begin to get very complex once your organization is operating in more than one state. Why? Tax policies are an area where states vary wildly. For instance, some states require employees to meet certain thresholds before employers have to withhold state taxes. Other states require employers to start withholding employee wages from day one of the employee’s terms with you. There’s also a complicated tangle of reciprocal agreements, different rules, and other challenges employers have to deal with once their businesses move across state lines.Keeping up with quarterly/year-end filings, regulations, and deadlines can get overwhelming pretty fast especially if you have employees in multiple states. Outsourcing Payroll to a specialist allows you to focus on your business and ensures you are always compliant with various taxing authorities.
You should ask these questions before hiring a payroll company to ensure they are a good fit for your business.
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