It's good to have you here, @NancyC1.
To clear things out. Yes, there would be an impact on your state unemployment and state worker's compensation if you leave his work location address as Washington (WA). Since both states have different state tax policies.
This becomes more challenging if your employee works in a state where your company is not registered. For each state where your company has employees, you must register your business with the local and state tax authorities.
You should also get in touch with the Michigan tax agency for additional guidance on how to set it up correctly.
Once the work location had been confirmed, we'll set up your employee and payroll taxes in a new state. Here's how:
- Go to Payroll, then Employees.
- If your employee is new, select Add an employee. Otherwise, select your employee from the list.
- From Employment details, select Start or Edit. Select or add the work location where you’re required to pay State Unemployment Insurance. If you have remote employees, the work location may be different than where your employee physically works. Then select Save.
- From Tax withholding, select Edit. Go to the State withholding section. If you see two states:
- If you don’t need to collect state withholding in one state: in the Filing Status ▼ dropdown, select Do not withhold (exempt).
- If there’s a reciprocity agreement between the two states, select if your employee gave you a Certificate of Nonresidence form. The form determines which State Withholding is collected.
- If you see a Local Taxes or Other taxes section, select the applicable taxes and enter the rates.
- If you or your employee are exempt from any taxes (not common), from Tax Exemptions, select the applicable tax(es).
- When finished, select Save.
For future use, if you want to access your state agency websites, feel free to read this article: Access state agency websites for payroll.
Click the Reply button below if you have additional questions about Unemployment tax. I'll be happy to lend a hand. Have a good day!
