Many states have issued guidance on payroll tax withholding as many employees find themselves working from home in a different state that their usual place of employment. Jason Rosenberg and Adam Caputo of Withum outline recent guidance and look at the potential effect on other state taxes.
Typically, states source employee wages for payroll tax withholding purposes to the state where the employee performs the services, with certain exceptions. Recently, a number of states have issued guidance and procedures in respect to State and Local Payroll and Employment Taxes in Light of Covid-19.
In addition, a number of states have exceptions to the general withholding rule, often referred to as the “Convenience of the Employer” rules; where that the wages of telecommuting employees continue to be sourced to the employee’s primary office location, unless the work performed outside the state is for the necessity of the employer.
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by jason rosenberg
june 08, 2020