Accounting, Payroll & Pension Issues/Payroll Taxes

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Question
We have an employee that lives in Indiana but works in Ohio.  We currently do not have an account in Indiana.  As the employer are we required to withhold Indiana based on the reciprocal agreement between the states.  The employee currently does not have Ohio withheld either because she requested not too.  I don't think that's correct either. Any help would be grateful.

Barb

Answer
You are not required to set up an account in Indiana and withhold taxes although you may if you wish. It will give you nexus in that state and you may have to pay corporate taxes.

If the employee fills out IT NR4 for Ohio you do not have to withhold taxes for Ohio. You need to send in this form to Ohio.

If you do hold taxes out for Ohio the employer will get credit for them in Indiana.

If you do not withhold from either state it is the responsibility of the employee to pay the taxes.

Shirley

Accounting, Payroll & Pension Issues

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Shirley McAllister, CPP, PHR

Expertise

I can answer payroll questions, payroll tax questions, 401K questions. No stock option questions please and I have some knowledge of other pensions but am most familiar with the 401K pension. I can answer U.S.and Canada payroll questions proficiently and have a good general knowledge of UK and South Africa and some knowledge of Australia and New Zealand Payroll procedures. Please do not ask me homework questions I do not have time to answer them.

Experience

25 years with an international company in the Human Resources, Payroll and Payroll Tax areas.

Organizations
SHRM, APA, I.O.M.A.

Publications
I.O.M.A. and BNA

Education/Credentials
P.H.R., C.P.P., Canadian Payroll Administrator, Successfully passed APA class on UK Payroll Administration. Boise State University Human Resource Certification

Awards and Honors
APA Hotline Citation of Merit for last 8 years.

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