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Need Help with GA Withholding

It's been a very long time since I've done multi- state payroll and now I know why I have avoided it. LOL

We are a Minnesota based construction company with locations in NV, AZ and GA. We have employees who are given direction and control out of our GA office. These employees live in other states (OK, UT, TX, and NC) they don't do any physical work in GA. They travel and work in other states. There is a slim possibility they may end up in GA at the office for a day then will head out to an out of state worksite. We do not have locations in the states they live in. Since they are getting their direction from the GA office, shouldn't we be withholding GA withholding from them?

Any input on this situation would be greatly appreciated.

Following the dept of labor on unemployment it seems we should pay unemployment to GA since that is where the direction and control comes from.

Comments

  • David WarrenDavid Warren ✭✭✭✭

    States mostly care about where the work was done. They rarely care about were the employee lives, and almost never care about where the direction comes from. Also, there is no one-size-fits-all answer for all state. Each state uses different rules.

    There is a small chance you are right about SUTA. Direction is one of the possible things looked at but only if all previous tests fail. If Bob works 51% of his time in a state, then THAT is the state for SUTA. If I worked for MN SUTA, I would say MN was the state.

    SIT is a lot more complicated. Some states have reciprocal agreements and most states have a minimum threshold before the withholding/reporting requirements kick in. Some states do not have SIT at all, and hence no related rules.

    If you are really serious about getting it right, subscribe to one of the on-line payroll library services (APA, BNA, CCH, RIA) and look up the actual rules for the states involved. The other obvious problem is that anytime an employee works in a state, you risk not just payroll nexus, but also nexus for sales tax and other taxes. If a state sends you a nexus letter, you need a better response then "some guy said treat everyone like they are working in GA".

  • Thanks David. The more I looked into this you are correct SIT should be withheld in the state that work is done for the most part- it does get complicated. I will need to look into getting one of the the payroll library service in order to determine each of the state laws.

  • David WarrenDavid Warren ✭✭✭✭

    Multi-state payroll is a b****, and locals can get even worse. Fortunately, local jurisdictions rarely go chasing out of state employers and SUTA always only goes to one state and is mostly a pass through. I am not saying states will not argue SUTA but it is normally one person at a time in response to a filed claim.

    SIT however, the state gets to keep that, and SIT can get very ugly. Sometimes more then one state will claim SIT for the same wages. NY for example is very aggressive historically. And while many states have reciprocal agreements, they all tend to be different. Fun times.

    I have used BNA and CCH, but your choice.

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