Nonresident and Mobile Workers: Nexus Triggers, State Tax Traps

The increase in employers and employees operating or working in multiple states triggers new employment tax requirements. With changes to nexus thresholds and filing obligations following the Wayfair decision, tax professionals and advisers must understand how these changes interact with the complicated state tax rules and requirements regarding withholding, personal income tax allocation, and available resident credits.

Many states impose withholding tax administrative duties for out-of-state employers if the employer sends the employee to work in the other state or permits an employee to telecommute. With many companies registering in multiple states for sales taxes, they must now confront their obligations in those states regarding employment taxes. Failure to adhere to such duties can lead to audits that may result in even more tax obligations. Employers must identify applicable state tax rules and filing requirements to avoid unintended penalties.

For nonresident employees, tax advisers must also focus on the interplay between state employment tax obligations and personal income tax rules for traveling employees in multiple states. Employees must consider complying with a complex web of state rules for individual income tax allocation and any available exemptions or resident credits to minimize their tax liability.

Tax professionals and advisers must grasp rules in each state for potential tax and keep pace with state tax law developments in response to the economic nexus standards.

Listen as our panel discusses differing state tax withholding rules, personal income tax allocation, and resident credits, as well as provides methods for ensuring registration, reporting, and administrative compliance with state tax laws.

1. Principals of state tax and nexus in this area
2. Recent state tax law developments
   1. Specific issues with withholding and unemployment taxes
   2. Personal income tax allocation and resident credits
   3. Administrative challenges and options

The panel will address these and other on-point issues:

• What are an employer's withholding and compliance obligations in various states?
• When does telecommuting trigger nexus for an out-of-state company?
• Ensuring state tax withholding registration, reporting, and compliance
• What are the standards for nonresident employee visits to different states requiring companies to register for withholding tax purposes?
• Personal income tax allocation and resident credits

Learning Objectives

After completing this course, you will be able to:

• Understand nexus triggers for both employers and employees
• Ascertain which key states have the toughest withholding tax rules
• Discern the de minimis standards for nonresident employees in different states
• Identify when to register for state withholding tax
• Identify issues in personal income tax allocation and methods to maintain state tax compliance
• Recognize available resident credits and how to apply them
• Establish best practices for your company's policies on traveling employees and telecommuters

• Field of Study: Taxes
• Level of Knowledge: Intermediate
• Advance Preparation: None
• Teaching Method: Seminar/Lecture
• Delivery Method: Group-Internet (via computer)
• Attendance Monitoring Method: Attendance is monitored electronically via a participant's PIN and through a series of attendance verification prompts displayed throughout the program
• Prerequisite: Three years+ business or public firm experience at mid-level within the organization, preparing complex tax forms and schedules; supervisory authority over other preparers/accountants. Specific knowledge and understanding of withholding tax obligations in various states for nonresident employees or those who work in other states periodically which may trigger unwanted nexus.

Strafford Publications, Inc. is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of Accountancy have final authority on the acceptance of individual courses for CPE Credits. Complaints regarding registered sponsons may be submitted to NASBA through its website: www.nasbaregistry.org.