No State Tax withheld!


K

Keith

My employer is in the state of Indiana and has withheld
Federal Income taxes all year. He has not withheld any
state tax all year because I live in Ohio. I know Indiana
has a reciprocal agreement with Ohio. Is he required to
withhold any state tax? He has never offered me any forms
to fill out other than a W-4 form. I know I owe Ohio taxes,
but do I also owe Indiana anything? Did he violate tax laws
or is he in the clear? What should I do? I will be sending
him a WH-47 filled out for the upcoming year. Please help!
 
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K

Katie

Keith said:
My employer is in the state of Indiana and has withheld
Federal Income taxes all year. He has not withheld any
state tax all year because I live in Ohio. I know Indiana
has a reciprocal agreement with Ohio. Is he required to
withhold any state tax? He has never offered me any forms
to fill out other than a W-4 form. I know I owe Ohio taxes,
but do I also owe Indiana anything? Did he violate tax laws
or is he in the clear? What should I do? I will be sending
him a WH-47 filled out for the upcoming year. Please help!
Where do you work?

If you work in Indiana, and your employer does not have a
business location or do business in Ohio, he is under no
obligation to withhold Ohio state income tax for you. As an
Ohio resident working in Indiana, you do not have a tax
liability to Indiana; therefore, he is under no obligation
to withhold Indiana tax either.

You will be subject to a penalty for underpayment of
estimated taxes to Ohio. Next year you should make
quarterly estimated tax payments to Ohio so that this
doesn't happen again.

Of course, if you worked for this employer IN OHIO, he would
have nexus with Ohio and be required to withhold Ohio taxes
for you.

Katie in San Diego
 
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A

Arnie

Katie said:
Keith wrote:
Where do you work?

If you work in Indiana, and your employer does not have a
business location or do business in Ohio, he is under no
obligation to withhold Ohio state income tax for you. As an
Ohio resident working in Indiana, you do not have a tax
liability to Indiana; therefore, he is under no obligation
to withhold Indiana tax either.

You will be subject to a penalty for underpayment of
estimated taxes to Ohio. Next year you should make
quarterly estimated tax payments to Ohio so that this
doesn't happen again.

Of course, if you worked for this employer IN OHIO, he would
have nexus with Ohio and be required to withhold Ohio taxes
for you.
What about unemployment insurance? There's no mechanism
that I know of for an individual to pay unemployment
insurance, so how is such an employee covered? Since no
contribution is made in either state, it seems that would be
problematic. Isn't an employer obligated to pay
unemployment insurance for all employees?

TM
 
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K

Katie

What about unemployment insurance? There's no mechanism
that I know of for an individual to pay unemployment
insurance, so how is such an employee covered? Since no
contribution is made in either state, it seems that would be
problematic. Isn't an employer obligated to pay
unemployment insurance for all employees?
If the employee works in Indiana, he is properly covered for
unemployment insurance in Indiana. The fact that the
employer doesn't withhold Indiana income tax doesn't mean he
isn't covered or reported for unemployment. Under the
Uniform Unemployment Insurance Code, an employee is covered
for unemployment in the state where he performs all or most
of his services, not where he lives.

If the employee works in Ohio, the employer should be
registered as an employer with Ohio and cover him for
unemployment insurance purposes there.

Katie in San Diego
 
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