Employer state w/h employee lives out of state

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#1
kathyt  
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My client, the employer, is in Louisiana, and hired one employee who lives in Georgia, another lives in Oklahoma; all work is performed in Louisiana. Client is a restaurant and the out of state employees are college students in LA but permanent residence is out of state. Does the employer have to w/h GA or OK tax? I have never done that before, if the work was performed in LA then I w/h for LA. But QB online is saying we have to set up GA and OK tax - I set the work location to LA, did I set something up wrong or do they really have to w/h the other states?
 

#2
CathysTaxes  
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Do the states have reciprocal agreements with each other? If they do, I would do withholding for the employees home state. You also may have to do unemployment taxes in the home state. I'm not sure if you have you can get away with just doing withholding in LA.
Cathy
CathysTaxes
 

#3
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If all the work is done in Louisiana and your client has no nexus outside of the state, your client would generally not be required to withhold for any other state. Your client could, as a benefit to those employees, also withhold for those states if they wished to.

I don't think LA has any reciprocal agreements, so the college students would be potentially taxable in LA and in their home state with a credit for LA taxes against home state taxes.
 

#4
MEMCPA  
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If an employee is added with an out of state address, QBO payroll assumes you owe payroll taxes to their home state.
 


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