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Category: California Employment Law
Satisfied Customers: 28001
Experience:  I have 30 years of experience in the practice of law, including employment law and discrimination law.
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Does a WA state based small business employer who hires a part-time

Customer Question

Does a WA state based small business employer who hires a part-time teleworker [20-25 hours/week] who is residing in CA, have any tax obligations in CA? If yes, what are those obligations? Where can reliable information be found?
Submitted: 1 year ago.
Category: California Employment Law
Expert:  LawTalk replied 1 year ago.
Good afternoon,

I'm Doug, and I'm sorry to hear of the confusion. My goal is to provide you with excellent service today.

Does the employee located in CA sell any product or service on behalf of the company?

By tax obligations, are you referring to state disability and unemployment taxes---or simply, traditional business taxes?

Doug
Customer: replied 1 year ago.

The employee located in CA does not sell any product or service on behalf of the company.


 


By tax obligations, I am referring to any and all -- state disability and unemployment as well as any other potential business tax filings that CA may required, if any.

Expert:  LawTalk replied 1 year ago.
Good afternoon,

For any employee you may have in another state, that state's employment laws apply to both you and your employee---including the obligation to pay payroll taxes to the state. When you pay the employee, you will have to pay unemployment taxes and state disability taxes---and in CA you will have to provide workers' compensation for your employee. Additionally, you will have to withhold and file state tax withholding for the wages paid to that state employee.

As the employee is not selling anything, there is no business income tax that your company will have to pay to the state of CA, or the county or the city where the employee works.

Your federal filings will not change either, fortunately.

CA is not a particularly employer-friendly state and the burdens placed on having just one employee in the state may not justify the trouble and expense. Here are links to a couple of state websites that may provide you with a good idea of the employer obligations when having employees working in the state:

http://www.edd.ca.gov/payroll_taxes/FAQ_-_Payroll_Taxes_General_Information.htm

http://www.edd.ca.gov/payroll_taxes/




You may reply back to me again, using the Reply to Expert link, if you have additional questions.

I wish you the best in your future,

Doug
Customer: replied 1 year ago.

Are there any tax or reporting obligations for WA state employers who contract with independent contractors who reside in CA?

Expert:  LawTalk replied 1 year ago.
Good afternoon,

WA does not tax you on employee payroll for employees who work entirely in another state. If the employee were to work part time in WA though, you would have to pay the same taxes in WA as in CA based on the amount of income earned by the employee in each state.

You may reply back to me again, using the Reply to Expert link, if you have additional questions.

I wish you the best in your future,

Doug
Customer: replied 1 year ago.

Thanks; the related question was about independent contractors [not employees] with the same scenario of WA / CA. Let me restate:


Are there any tax or reporting obligations for WA state employers who contract with independent contractors who reside in CA?

Expert:  LawTalk replied 1 year ago.
Good afternoon,

Had I known you were talking an Independent Contractor, I could have answered you in a heartbeat.

An independent contractor is another business. You have zero tax liability for independent contractors. You get a W-9, issue them a 1099 and that is it. No taxes, no hassle.

You may reply back to me using the Continue the Conversation or Reply to Expert link if you need any clarification of my answer.


Please remember to rate my service to you when our communication is completed, so that I will be compensated for my time in providing you with the information you requested. I will be happy to continue further, and to assist you until I am able to address your concerns, to your satisfaction.

I wish you the best in 2013,

Doug
Customer: replied 1 year ago.

Last related question on the independent contractor in CA... does a sole proprietor need to set up a business to engage in independent contractor work or can they simply claim the income on a personal tax return?

Expert:  LawTalk replied 1 year ago.

Good evening,

Legally, a sole proprietor/independent contractor needs to establish a business with the city they work in---even if they telecommute. That means a business license generally, in the city where they work. The must pay taxes to the city and the state, and if they have work property---computer phone etc---that they use, they pay a very small tax based on property in use in the business each year.

Some folks don't jump through the hoops of a real business---and get away with it because they have no impact on the local economy, don't advertise, etc. But the law says they must have a local business license and pay taxes.

How they run THEIR business has no impact on you, though.

Please keep in mind that until you rate me highly for my service, I will not be credited with helping you.

Thanks again.

Have a great day,

Doug

LawTalk, Attorney
Satisfied Customers: 28001
Experience: I have 30 years of experience in the practice of law, including employment law and discrimination law.
LawTalk and other California Employment Law Specialists are ready to help you
Expert:  LawTalk replied 1 year ago.
Thank you for your positive rating of my service. It has been my pleasure to assist you and I hope than you will ask for me on JustAnswer should a future need ever arise.

Please feel free to bookmark the following link so you can request me to answer any future legal questions you may have:
http://www.justanswer.com/law/expert-lawtalk/

Thanks again.

Doug

When you receive your Customer Satisfaction Survey from JustAnswer, please do rate me highly (9-10) there as well. It benefits my ability to assist you and other customers, and would be tremendously appreciated.

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