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| This is a discussion on Out of state employee question within the Fred's House of Pancakes forums, part of the PriusChat Forums category; I typically keep my threads Prius related but figured with the large member base, perhaps someone could answer this question. ... |
Out of state employee question
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| Senior Member Join Date: Oct 2007 Location: Gilbert, AZ
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Friends: 1 | I typically keep my threads Prius related but figured with the large member base, perhaps someone could answer this question. My business is located in Arizona and I'm in the process of writing an offer letter for a potential employee who lives in Nevada. To make things easier I was initially thinking I could pay her as a contractor but found out that in order to get her and her kids on my United Heath Care she had to be an actual employee. An initial call by my book keeper to "the state" (not sure who she called) revealed that our new hire would have to pay Arizona state tax. This doesn't sound right to me. I would have thought she would only be responsible for the tax in her home state (in which Nevada doesn't have state tax). Does anyone have any insight on this? Thanks! Mike |
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| resident lab rat Join Date: Mar 2005 Location: south of lake Michigan
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Friends: 26 | yep, that's about right. i pay tax to the state where i get my income. my home state lets me claim a tax credit for that amount, so i don't become liable for double when filing in 2 states. since NV doesn't have a state tax at all, i'm not sure how one would best handle that situation. |
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| | #3 |
| Senior Member Join Date: Oct 2004 Location: Fremont, CA
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Friends: 0 | She will have to pay Arizona state tax unless you set up a branch in NV, and hire her as employee of that branch. More paper works on you! Or, you can always give her high salary to compensate for the state tax she has to pay Arizona. Less money for you! So, either - more paper works for you + cost of setting up branch and report tax annually to NV - less money for you (pay her higher) - less money for her (she gets less after tax) One of the three choices. |
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| | #4 |
| Senior Member Join Date: Oct 2007 Location: Gilbert, AZ
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Friends: 1 | Now if she were to pay Arizona state tax would she get the entire amount back at the end of the year because she was a resident of another state? Could she file the state tax form when hired but claim she's exempt since AZ isn't her state of residence? |
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| | #5 |
| resident lab rat Join Date: Mar 2005 Location: south of lake Michigan
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Friends: 26 | here's a bit from the nonresident arizona tax form instructions: Are You Subject to Tax in Arizona? You are subject to Arizona income tax on all income derived from Arizona sources. If you are in this state for a temporary or transitory purpose or did not live in Arizona but received income from sources within Arizona during 2007, you are subject to Arizona tax. Income from Arizona sources includes wages, rental income, business income, the sale of Arizona real estate, interest and dividends having a taxable or business situs in this state, or any other income from an Arizona source.
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| Boola Boola Member Join Date: Feb 2007 Location: New York, NY
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Friends: 22 | Mike, I suspect you need info from people with specific knowledge of Arizona and Nevada state tax laws. For instance, in New York City, if a non-resident works here, her income earned here will be subject to New York City commuter income tax. It wouldn't matter if she were a resident elsewhere in New York State or a Nevada state resident. If she's a non-NYC resident and works in NYC, the income earned here will be subject to NYC income tax, specifically, the NYC commuter income tax. EDIT: Yes, e.g., see galaxee's post about Arizona nonresident tax form.
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| P719 of ??? Join Date: Nov 2006 Location: South Jersey
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Friends: 2 | Mike, maybe you should move your business to Nevada. |
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| | #8 |
| Senior Member Join Date: Oct 2007 Location: Gilbert, AZ
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| | #9 | ||
| Senior Member Join Date: Oct 2007 Location: Gilbert, AZ
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Friends: 1 | Quote:
Quote:
Mike | ||
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| | #10 |
| Platinum Member Join Date: Mar 2006 Location: Minnesota
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Friends: 4 | State Income Tax Returns - Tax Tips from TurboTax Thats a good place to start. The basic rule is you file a tax return in each state you live or work in. Since the law differs across state borders, it's hard to tell right off the bat what needs to happen in a particular situation. Generally speaking, each state has a resident and non-resident tax form to fill out, and there are places to fill in the amount of tax paid to another state. If she is currently employed in California and living in Nevada, and her employer doesn't have a branch office in Nevada, then i would guess that she is (either unintentionally or intentionally) breaking the law by not paying taxes in California. Again, thats just a guess because i can't find anything specific in my 5 minutes of google searches. |
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