By CPA SAM
Where Do I Pay the Unemployment?
Q. I have been asked to find regulations similar to the state withholding reciprocity rules for unemployment. I have a payroll person at one of our business units, who every time an employee is on a temporary assignment in another state she changes their SUI state to that state. This is causing big issues not only for the employee but for those of us who process the SUI returns. Any help you may be able to provide will be greatly appreciated.
A. The answer to your question can actually be found in the unemployment statutes of the states involved in your scenarios. Generally, all states but Minnesota follow guidelines that establish a reciprocity-like arrangement for employers where unemployment tax is paid to the state where the employee works. If the employee works in multiple states, then UI tax is paid to only one state. The general order for choosing the UI state is (check with the states involved for specifics):
1. Where does the employee perform most of his/her work?
2. Where is the employee based?
3. From which state is the employee’s work controlled?
4. If none of the above apply, use employee’s residence state.
The state you select doesn’t change unless the employee is making a permanent move in which case there are predecessor state rules involved. This is a very common question for employers who operate in multiple states.
Tags: Employer, multi-state, Payroll, Tax, unemployment
