Hello there, @chass1228.
Thanks for coming in with us today. Let me make sure you are routed to the right support.
Since there is no reciprocity agreement between your state, you'll just need to make sure you have the correct setup from your Employee Settings.
Also, we highly recommend consulting your tax adviser or getting in touch with your state agency. They'll be able to guide you on how to handle this concern to avoid penalties in the future.
To be able to process your employee's payroll, you'll need to set this up correctly on the Workers page. If the employee is exempted, you'll need to change the filing status of the second state to Do Not Withhold. You can check out this article for more information: About multistate employment payroll situations.
I'll include these articles, so you can check tax compliance:
Let me know if you have follow-up questions about customer prepayments and I'd be glad to clear things up for you.
