Non-Resident Certificates for Employees In Other States

Background

If you have employees living or working in a state different than your main business state, these are considered non-resident employees. You may provide them a non-resident certificate for the main business state.  In some states, the non-resident certificate allows the employee to declare that they are exempt from income taxes for the business state, and instead income taxes will be withheld for their home state. For a full definition, see Non-resident in our Payroll Glossary.

Also see our blog article Which States Have Reciprocal Agreements… and What Does That Mean?

Handling Non-resident Employees in Patriot Software

If you have a non-resident certificate on file for the employee, you will need to indicate this in their Taxes page.   You’ll see a “Missing Information” item for this employee if you have indicated in your Company Tax Settings page that you are withholding income tax for this state.  See Multi-State Income Tax Withholding for more details.

To indicate whether a non-resident certificate is on file for an employee:

Payroll > Employees > Employee List > select Employee Name > “Taxes” link at the top > Edit.

Or click the link in the Missing Information list on the Payroll Home page.

If you have a non-resident certificate on file for this employee, select “Yes” and click the Save button at the bottom of the page.

If your state has a non-resident certificate, the system will apply the tax rules and will determine which state tax to withhold.