![]() You may need to qualify if, for example, you have a physical presence in the foreign state, or if you routinely accept orders or execute contracts there. Depending on your type of business, what your remote employee is doing, how many remote workers are in a state, and how long they will be doing that work in the foreign state, you may need to “qualify” your corporation or limited liability company in that state.įoreign qualification is the process of applying for authority to do business in a state other than the one in which the corporation or limited liability company was formed. Foreign qualificationįoreign qualification may come into play if you have formed a corporation or limited liability company and if you have employees working in a state other than the state in which your corporation or limited liability company was formed (which is referred to as a “foreign” state). You (and your employees) will probably want to get the advice of a tax expert due to the complexity of this issue. This may mean, for example, that remote employees may encounter double taxation - being subject to income tax in both the state they reside and the state in which their employer operates.Īnd what if an employee only works a few days at home (out-of-state) and the remainder at the office? Now, things get more complex. Some states that border each other have entered into reciprocal agreements related to allowing an employee who lives in one state but works in a neighboring state to have their withholding tax paid to the work state.īut in certain states the law is different. ![]() For example, if your head office is in State A but your remote employee works at home in State B, under the physical presence rule you are required to withhold unemployment and state taxes in State B, even if you don’t have a physical office there. Have employees travel to job sites in other statesĪs a rule, employees pay taxes to the state in which the work is performed (known as the “physical presence” rule).If your employees work from home in another state, where do you withhold taxes? Payroll can get particularly tricky for employers who Payroll requirements (state tax withholding and unemployment taxes for remote employees) Here are some of the things you need to know about maintaining compliance with the laws and regulations that govern remote employees. Unfortunately, such considerations are sometimes a surprise to employers who don’t have an HR department or lack an understanding of the implications of having remote employees. ![]() These can impact everything from business taxes to workers’ compensation. ![]() And many workers, forced to work from home for the first time due to the pandemic, found that there were advantages for themselves as well.īut working from home can also mean dealing with some major compliance requirements. Remote work has many benefits for companies, including access to a wider pool of employee talent (regardless of location), reduced employee turnover, and cost savings. ![]()
0 Comments
Leave a Reply. |