State payroll & nexus for remote staff — how much of this can I do myself?
Some of it, yes — and we will say so on the call if that is the honest answer. The parts that are worth paying for are the ones where a missed election, a missed deadline or an unverified threshold costs more than the fee: withholding follows where the work is performed, with reciprocity and convenience-of-the-employer rules complicating the result.
What if I have already filed and got it wrong?
That is a common starting point. We re-derive the position, identify whether an amendment or a disclosure route is the right vehicle, and tell you which one preserves the relief that is still available. The order matters more than the speed.
How long will it take?
It depends on the documents rather than on us. Once the pack is complete most filings turn around inside a fortnight; anything that needs a certificate from a tax authority runs on that authority's timetable, which we tell you at the start rather than at the end.
Does one employee working from home create tax obligations in their state?
In most states, yes. An employee physically performing work in a state is presence, and presence is the usual test for nexus. That single hire can register the company for payroll withholding in that state, bring it within the state's corporate income tax net, and in some states begin the sales tax analysis as well. None of that depends on the company having an office, a warehouse or a customer there. The practical consequence is administrative before it is financial: accounts to open, returns to file on a state calendar, and an apportionment question at the corporate level that did not exist the day before the hire.
Which state do I withhold for when my employee works from their house?
Start from where the work is physically performed, because that is the default rule in most states. Then test two things that override it. Reciprocity agreements between neighbouring states can let an employee be withheld in the state where they live rather than where they work. Convenience-of-the-employer rules do the opposite in a handful of states: they treat days worked at home as days worked at the employer's location, unless the arrangement exists for the employer's necessity rather than the employee's preference. Getting this wrong usually means withholding to the wrong state for a full year, which has to be unwound with both of them.
What is the convenience of the employer rule and does it apply to us?
It is a sourcing rule used by a small number of states. Where it applies, days an employee spends working at home are treated as days worked at the employer's office, so the employer's state taxes them even though nobody was there. The exception is necessity: if the role genuinely cannot be performed at the employer's location, the days can be sourced where they were worked. Whether you are exposed depends on which state your office sits in and where the employee lives, so it is a two-state question rather than a policy you can set once for everyone.
We use an employer of record, so do we still have state nexus?
Often, yes. An employer of record can carry the payroll registrations, the withholding accounts and the employment filings, and that is genuinely useful. What it does not reliably do is answer the corporate question. The employee is still performing your work in that state, and most state nexus tests look at the activity rather than at whose payroll the person sits on. Income tax nexus and the apportionment consequence can therefore arrive with the hire even where the provider is handling every payroll obligation flawlessly. Test the presence risk separately from the payroll arrangement, because the provider is not engaged to do it.
Do I have to register my company in a state I have never visited?
Very possibly. Registration is triggered by what the company does in the state, not by whether anyone from head office has been there. An employee working in the state is doing the company's work there. That commonly produces a payroll withholding account, an unemployment insurance account, and a foreign qualification with the state's business registry, with an annual report and a registered agent attached. The corporate income tax filing follows from the same facts. The work is mostly one-off set-up followed by a recurring calendar, and the cost of doing it late is usually penalties on returns that would otherwise have shown little or nothing owing.
Our employee moved states and payroll never changed — how do we fix it?
Establish the date the work actually moved, because that date governs everything else. From it you can see which state was withheld incorrectly, which state should have been, and whether registrations were needed in the new state for payroll, unemployment insurance and the corporate filings. The correction usually runs in two directions at once: a refund position or amended returns in the old state, and late registrations with catch-up filings in the new one. The employee's own return is affected too, since they may have paid to one state while being taxable in another. Doing both halves together is what stops the same wages being taxed twice.
Should I use a branch or a subsidiary abroad?
A branch is the same legal entity operating in another country, so its profits and losses sit with the parent and it is taxed there as a permanent establishment. A subsidiary is a separate company, taxed in its own right, with dividends and withholding on the way home. Losses, repatriation cost and liability usually decide it, and the answer differs by country pair. See branch vs subsidiary.
What is a totalization agreement and how do I use one?
A social security agreement that stops you contributing to two systems for the same work, and lets periods in both count towards benefit eligibility in either. Which system you stay in depends on the agreement's rules for your situation — a seconded employee usually remains in the home system for a set period, a locally hired one usually joins the host system. You evidence it with a certificate of coverage obtained before or shortly after the assignment starts. See certificates of coverage.
