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Work in different state than the Home Office Minnesota

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  • Work in different state than the Home Office Minnesota

    Help!

    My spouse physically works (and lives) in MN. 99.9% of the time this is where he is located.

    Company is in WI and they are taking WI state taxes out of his check. We know this is wrong but can you help us with the documentation we need to present to the employer?
    Last edited by Rangeman; 04-04-2014, 03:03 PM.

  • #2
    Soft answer since these are not my states, but you could get the employer's tax guides for the two states, or contact the states directly and get an opinion letter.

    Possible problem, you are assuming that the employer does not know the law, when instead they might not care what the law is. I am in agreement if you have an employee working and living 99% in one state, then that is THE state for payroll purposes. The problem is that nexus in that state is created for ALL purposes, which is likely what the employer is trying to avoid. I worked for a company in the 1990s that had employees in something like 32 states, but we only had facilities in maybe 5 states, and the other 27 some states were outside sales people for whom the company had no actual business reason to have employees in. KPMG determined that having employees work out of their house in those states was costing the company something like one million dollars in extra non-payroll taxes each year, compared to just basing those (less then 50) employees out of one of the 5 states we had a business reason to be in. While we did not directly try to relocate those existing employees, we did put a 45-state hiring freeze into effect, where it basically took approval from Very Senior Management to hire someone in those states. At what point we no longer had employees in state, we would try very hard to shut done the tax nexus.

    Second problem, SUTA is likely being reported to the wrong state also.
    "Reality is that which, when you stop believing in it, doesn't go away".
    Philip K. **** (1928-1982)

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