Have Tax Questions? Ask a Tax Expert for Answers ASAP
Could anyone clarify what this means for NJ Tax Law: "where it is expected that a non-resident employee will work only a short period of time within this state and it is reasonably expected that his total wages will not exceed personal exemptions, employer need not withhold or deduct any amount from employees wages until aggregate amount paid equals or exceeds the exemptions" If we as an out of state employer have employees in NJ for temporary projects (3-4 days) who are non-residents do we have to withhold on their NJ income or their resident state?
Hi and welcome to our site!You sited regulation for employers that allows not to withhold state income tax from wages when nonresident employees are working only for a short period.
http://www.state.nj.us/treasury/taxation/pdf/current/njwt.pdfThe amount of personal exemption in NJ is $1000 - - http://www.state.nj.us/treasury/taxation/njit2.shtmlThus if total wages paid to a nonresident employee is less than $1000 withholding is not required.
Hi lev, thanks again for your help. Do you know if New York has a similar exemption?
It seems that NY doesn't have similar provision - see page 27 here - New York State nonresident employees - http://www.tax.ny.gov/pdf/publications/withholding/nys50.pdfSee also - http://www.tax.ny.gov/pdf/memos/income/m06_5i.pdf
great thanks again for your help!!
Trying to wrap up this tax issue we have been having. I was just wondering if you would be able to tell me as the employer if we withhold only in the state where the employee is working (not necessarily the state where they are living), what penalty or risk would we assume by not withholding in the resident state? Thanks so much with all your help I think I am finally getting somewhere with my directors regarding this issue!
So if we do not withhold in their resident state for example California, for work being performed in NJ, we would be ok not withholding anything further in California (even if we have other employees who work/live in California)?
Also if they work in a state with no income tax like Florida but live in a state with income tax, like California, would we have to withhold in California or is that purely on the employee to pay their resident state taxes?
Thanks this is the verification I wanted. If we fail to withhold in California the difference of what was withheld in the work state and California, would we be penalized the same as any employer who failed to withhold from an employee (whether they were employed in California or a resident who worked outside of California)