Multi-State Payroll (USA)

MAIN MENU >   Payroll > Taxes & Deductions

Multi-State Payroll refers to the following situations:

  • If an employee works in one state and resides in another state.

  • If a business operates in more than one state.

  • If an employee works in multiple states.

It’s important to understand your business presence or nexus rules and any reciprocity agreements between states. These agreements may exempt employees from tax withholding in the state where they work. Refer to the state tax agencies that apply to your business.

TimeTrex calculates withholding taxes by referencing the Tax Remittance Agency name and the name of the tax. If employment taxes or deductions from multiple states or localities are required, verify that the Taxes and Deductions for the Remittance Agency has been added and add all applicable Tax/Deductions to Employees.

 

If a Tax or Deduction no longer applies (i.e. when an employee moves between States/Localities)

To ensure the US State/Local Taxes appear properly on the W2's, keep the employee assigned to the Tax / Deductions record and specify an Eligibility End Date when the tax is to stop being deducted for that employee.

To Edit Start and End Dates for Tax / Deductions, use the following steps:

  • Click on Payroll, Taxes & Deductions

  • Select the Tax or Deduction record, then click Edit in the button bar.

  • Click on the Eligibility tab.

  • Enter a Start Date if there isn't already one. The Start Date can be a past date such as when the company began doing business in this State.

    NOTE:   This Start Date will effect all employees who are using this tax. Once the Start Date for a particular Tax/Deduction is entered it will allow a Start and End Date field to appear in each employee's tax record, which can be edited to suit their circumstances.

  • Click Save in the button bar to save your changes.

  • In the main menu, click Employee, then Employees.

  • Select the Employee, click the Edit button and then click on the Tax tab.

  • Select the Tax or Deduction that will no longer apply to this employee and click the Edit button.

  • Enter an End Date, the last date the tax or deduction will apply to this employee.

  • Add a New Tax /Deductions for the employee and add a Start Date, which would be the next date after the End Date entered in the step above.

Repeat these steps for all State/Local tax or deductions that are no longer applicable to the employee, as well as for those that are newly applicable.

 

TIP:   If the employee has moved residence, edit the employees address in the Employee, Employees menu, Contact Info tab or request the employee to update it through their Employee Profile menu, Contact Information.