Multi-state withholding calculation examples

Set up examples: Use automatic multi-state calculations

The client's work location is Ann Arbor, MI.
Their employee lives in Ann Arbor and works at the Ann Arbor location.
Set up an Ann Arbor, MI work location for the client in the Main tab of the Clients screen, if it doesn't yet exist, and mark the
Taxing address
checkbox.
Add the employee's information, including the address of their primary residence. Make sure that the Resident address checkbox is marked for that address.
If the client has more than 1 work location, make sure that the employee has the correct Ann Arbor location and department marked as the primary work location. This is in the Locations and Departments grid on the
Main
tab.

The client's work location is Ann Arbor, MI.
Their employee lives in Toledo, Ohio, and works at the Ann Arbor location.
The employee has requested that you withhold Ohio income tax.

Set up work location:
In the Main tab of the Clients screen, ensure there is an Ann Arbor, MI work location address. If not, add it.
Make sure the
Taxing address
checkbox is selected for this address.
Add employee information:
Enter the employee's details, including their Toledo, Ohio street address.
Ensure the
Resident address
checkbox is selected for this address.
Primary work location:
If there are multiple work locations, verify that the correct Ann Arbor location and department are marked as the primary work location.
Located on main tab of the
Employees
screen, then on the Locations and Departments grid.
Nonresident exemption certificate:
After receiving the Michigan Certificate of Nonresidency from the employee, mark the
Nonresident exemption certificate
checkbox.
Located in the
Payroll Taxes
tab of the
Employees
screen.
Set up Ohio tax withholding:
In the
Payroll Taxes
tab of the
Clients
screen, select
OH
from the
State
dropdown list.
Enter the Withholding ID and check the
Client has nexus in this state
checkbox.

Calculation options: Use alternate multi-state calculations

Automatic:
The state income tax calculation follows the application's default multi-state withholding algorithm, which is based on the specific multi-state withholding rules for each state.
Work only:
The application calculates only the state income tax for the employee's work states.
Work and resident - Allow credit:
The application calculates income tax for both the employee's resident and work states. The SIT amount calculated for each work state reduces the resident state income tax (SIT) amount by the SIT amount calculated for each work state, providing a credit.
Work and resident - Full:
The application calculates income tax for both the employee's resident and the states they work in. No credit is applied for the work state SIT.
Resident only:
The application calculates only the state income tax for the employee's resident state.

Automatic
Virginia SIT (nonresident): Gross taxable/taxable wages = $1,000.00. Tax = $49.23.
Illinois SIT (resident): Gross taxable/taxable wages = $0.00. Tax = $0.00.
Work only
Virginia SIT (nonresident): Gross taxable/taxable wages = $1,000.00. Tax = $49.23.
Illinois SIT (resident): Gross taxable/taxable wages = $0.00. Tax = $0.00.
Work and resident - Allow credit
Virginia SIT (nonresident): Gross taxable/taxable wages = $1,000.00. Tax = $49.23.
Illinois SIT (resident): Gross taxable/taxable wages = $1,000.00. Tax = $0.77.
Work and resident - Full
Virginia SIT (nonresident): Gross taxable/taxable wages = $1,000.00. Tax = $49.23.
Illinois SIT (resident): Gross taxable/taxable wages = $0.00. Tax = $50.00.
Resident only
Virginia SIT (nonresident): Gross taxable/taxable wages = $0.00. Tax = $0.00.
Illinois SIT (resident): Gross taxable/taxable wages = $1,000.00. Tax = $50.00.