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Posted by Katie on December 31, 2006, 11:50 pm
Please log in for more thread options Arnie wrote:
> Katie wrote:
>> Keith wrote:
>>> 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.
> 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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