Multi-State Income Tax Withholding

Background

If you have employees that work in another state, your business may be required to withhold the other state income tax because of your business presence (otherwise known as “nexus”) in that state. If you are unsure whether your business is required to withhold income taxes for employees working in a different state, please check with your accountant.

To find your state withholding forms for employees, check out our new employer help per state, where you can get specific links to state and federal employee withholding forms

Handling Multi-State Tax Withholding in Patriot Software

For each state in which your business has a work location, you will automatically be required to withhold state income tax.  For each additional state in which your employees are working, you will need to indicate whether you want to withhold state income taxes for that state.

Settings > Payroll Settings > State Tax Withholdings

• Choose Yes for each state that your business will withhold income taxes.
• Click Save.

After you add an employee, if the employee’s address is in a new state that’s not already in your state list, you will see a Missing Information item at the top of the page to alert you that you need to choose to withhold taxes for the new state.

If you have answered “Yes” to withhold income taxes for that state, for any employee whose address is in one of these other states, you will need to indicate on the employee’s Taxes page whether you have a non-resident certificate on file.  There will be a Missing Information item at the top of the page to remind you.  For more info, see Non-Resident Certificates for Employees in Other States.