ETS Tax Intelligence: Sourcing of SUI Wages
When an employee performs services in one state, proper reporting or “sourcing” of wages for state unemployment insurance (“SUI”) purposes is fairly simple; report the wages and remit taxes to that specific state. However, when an employee performs services in multiple states, employers are challenged with determining which state is the proper sourcing state.
All states have adopted a uniform set of statutory factors to determine where SUI wages should be sourced. These “four factors” are applied in the order of priority presented below. They should be reevaluated, on an employee-by-employee basis, when there is a change in circumstances.
If none of the above “four factors” apply, each respective state’s SUI sourcing provisions should be consulted, which may involve the use of interstate reciprocal coverage agreements that allow employers to choose the state of coverage.
Employers should carefully review current sourcing practices to assure SUI wages associated with multi-state employment are properly sourced. For more information on SUI sourcing or to discuss your company’s current SUI sourcing policies, please contact Pete Krieshok at (314) 214-7325 or via e-mail at firstname.lastname@example.org. You can also visit our corporate blog at https://insight.equifax.com/ for information on other employment tax matters that might impact your organization.
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