Out of State Employees

Hiring your dream team?! Employment does not have to stop at the state line! Whether you have remote employees, live near a border, or are just wanting to expand your geographic footprint – do not let the uncertainty of “how-to” stop you from growing your business.

With the onset of COVID-19 and the shift to ‘working from home’, out-of-state employment has become very common in today’s conditions. Although the thought of what is involved in getting this setup can initially be overwhelming, keeping yourself informed and allocating enough setup time should make this a streamlined process. Understanding the fundamentals and processes required is the first step to getting the ball rolling and to ensure out-of-state employment is a fit for your business!

The below information serves as a brief overview of items to consider:

  1. Register Business for State Tax ID #
  2. Register Business with State Labor & Unemployment Agency
  3. Familiarizing with State Laws (A Few Examples:)
    1. State Income Tax / Reciprocity Agreements
    1. Local Taxes
    1. Pay Frequency
    1. State/Local Minimum Wage
    1. Overtime Rules
    1. Meals & Breaks
  4. Purchase Workers Compensation Insurance
  5. Consider State Disability Insurance (If applicable)
  6. Configure Payroll Settings (Collecting Withholding Forms, Updating EE Record, Verifying Through Payroll)
  7. Setting Up Tax Payments

If you need assistance registering as an employer in a new state or if you need assistance updating the employee’s record with the correct state settings, please contact us at 707-586-4300 or IBSsupport@ibspayroll.com.

Disclaimer: These materials are provided for informational purposes only and are not intended as legal or tax advice. Readers of the IBS Blog should contact their legal or tax professionals to discuss how these matters relate to their individual circumstances.

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