What are the state and local tax implications of having remote employees?

Remote employees create multi-state tax complexity across several categories simultaneously. An employee working from home in another state can create income tax nexus for your business in that state, payroll tax withholding obligations in the employee’s state of residence, and in some cases sales tax nexus as well. Many businesses that rapidly expanded remote work arrangements during and after the pandemic created unintended multi-state tax obligations that have been quietly accumulating ever since. Yeo & Yeo helps businesses assess the full multi-state tax impact of their remote workforce, establish compliant payroll and income tax processes in all affected states, and address any historical exposure that may have accumulated.