As multi-state employers are well aware, the vast majority of states have personal income tax and require withholding state taxes from employee wages as a part of the employer’s payroll/tax responsibilities. In addition, there are many localities that require local withholding as well. Employers need to be aware of specific requirements and terminology relating to state witholding. There are many factors to consider when making withholding decisions for your employees:
- Employers operating and/or employees residing or working in multiple states creates a complex, confusing process
- States periodically change their processes, including new requirements for employers
- States’ reciprocal agreements and the impact on tax witholdings
Employee withholding can be a confusing and time consuming business in light of various local, state, and federal laws and regulations. View our complete bulletin for additional details on these challenges, along with best practices for employer consideration.
Learn about the Equifax interactive W-4 solution, delivered on the Compliance Center technology platform, to help employers simplify their process to ensure compliance when managing employee withholding, while reducing costs, improving efficiency, and minimizing errors.