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You may have to withhold state taxes for New York.
Can you tell me more about the job and relationship. for example:
1. what kind of business is it?
2. What are the employee jobs?
Based on the information you provided, I would tend to agree with your adviser. However, the reason you need to check is because of each states definition of a nexus.
If you have established a nexis in the state, then you are obliged to withhold taxes for that state.
Essentially if you are xploting the state market place, so for example, by sales, then you would be required to register in the state and withhold taxes.
For NJ> See, e.g., NJ Rev. Stat. [section] 54A:7-1(a) (employers maintaining an office or transacting business in the state and making a wage payment subject to New Jersey personal income tax to a resident or nonresident individual must withhold taxes).
Explanation: all wages earned in NJ are subject to NJ taxes. If you were to withhold NY taxes instead, that is ok, but the employee would have to pay any difference at the end of the year. (nj giving credit to ny) If you do not withhold NY taxes, you have to register with and pay taxes to nj.
for maryland, the following activities establish a income tax withholding nexus: my adivice is that if two or more conditiosnn exist that you should be registering wtih and filing taxes in Maryland.