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REMOTE EMPLOYEES

Remote employees by state

Payroll follows where the employee works. Each state page lists what applies when one employee lives and works from home there: which state's taxes, unemployment, paid leave and the state's employer rules, each from its official source.

Facts checked on October 5, 2026 against official sources, listed on each state page. For employers. General information, not legal or tax advice: confirm a rule with the agency before you rely on it.

Which state's taxes apply

  • The work state

    41 states tax wages for work done there, by residents and nonresidents alike; 9 have no income tax on wages; DC taxes only its residents' wages.

  • Unemployment

    Unemployment tax goes to the state where the work is localized: for an employee who works from home, the home state, not the company's.

  • Reciprocity

    15 states and DC have reciprocity agreements: an employee who lives in one state and works in a partner state is withheld for the home state, once the employee gives the employer the work state's certificate. The table below lists every pair, by work state. Arizona also exempts residents of California, Indiana, Oregon and Virginia, one way. Some pairs cover only employees who commute daily, so not an employee who works from home.

  • Convenience rules

    Delaware, New York and Pennsylvania tax a nonresident's days worked from home when the employee is assigned to an office in the state, works there on some days and works from home for the employee's own convenience. Connecticut and New Jersey apply theirs only to residents of states with their own rule. Residents of a reciprocity partner are withheld for their home state instead, so no convenience rule reaches them. Every other state taxes only the days worked there.

  • Days in another state

    16 states let a nonresident work there a set number of days a year before withholding starts, each with its own conditions. The list is below.

The terms, in the glossary: Multi-state payroll.

Reciprocity agreements

Who lives in one state and works in another, and is withheld for the home state with the work state's certificate.

Works inLives inCertificateSource
ArizonaCalifornia, Indiana, Oregon and VirginiaForm WECchecked October 5, 2026 (opens in a new tab)Arizona Department of Revenue, 2026 Form WEC Employee Withholding Exemption Certificate instructions (PDF)
IllinoisIowa, Kentucky, Michigan and WisconsinIL-W-5-NRchecked October 5, 2026 (opens in a new tab)IDOR, Form IL-W-5-NR, Employee's Statement of Nonresidence in Illinois (PDF); Publication 130 (February 2026)
IndianaKentucky, Michigan, Ohio, Pennsylvania and WisconsinWH-47checked October 5, 2026 (opens in a new tab)Indiana DOR, Income Tax Information Bulletin #28 (December 2024, PDF)
IowaIllinoisForm 44-016, Employee's Statement of Nonresidence in Iowachecked October 5, 2026 (opens in a new tab)Iowa Department of Revenue, Iowa-Illinois Reciprocal Agreement
KentuckyIllinois, Indiana, Michigan, Ohio, West Virginia and WisconsinForm K-4 (box 4) or 42A809checked October 5, 2026 (opens in a new tab)Kentucky Department of Revenue, Form K-4 Kentucky's Withholding Certificate 2026, 42A804(12-2025) (PDF)
KentuckyVirginiaForm K-4 (box 4) or 42A809Daily commuters onlychecked October 5, 2026 (opens in a new tab)Kentucky Department of Revenue, Form K-4 Kentucky's Withholding Certificate 2026, 42A804(12-2025) (PDF)
MarylandDistrict of Columbia, Virginia and West VirginiaForm MW507, line 4checked October 5, 2026 (opens in a new tab)Comptroller of Maryland, Form MW507, Employee's Maryland Withholding Exemption Certificate (2026, PDF)
MarylandPennsylvaniaForm MW507, line 5 (lines 6 and 7 for local tax)checked October 5, 2026 (opens in a new tab)Comptroller of Maryland, Form MW507, Employee's Maryland Withholding Exemption Certificate (2026, PDF)
MichiganIllinois, Indiana, Kentucky, Minnesota, Ohio and WisconsinMI-W4 (line 8b)checked October 5, 2026 (opens in a new tab)Michigan Treasury, Form 446, 2026 Michigan Income Tax Withholding Guide (Rev. 02-26, PDF)
MinnesotaMichigan and North DakotaForm MWRchecked October 5, 2026 (opens in a new tab)Minnesota Department of Revenue, 2026 Minnesota Income Tax Withholding Instruction Booklet and Tax Tables (PDF)
MontanaNorth DakotaForm MW-4, line 5checked October 5, 2026 (opens in a new tab)Montana Department of Revenue, North Dakota Reciprocity Agreement
New JerseyPennsylvaniaNJ-165checked October 5, 2026 (opens in a new tab)NJ Division of Taxation, NJ-WT New Jersey Income Tax Withholding Instructions (September 2025) (PDF)
North DakotaMinnesota and MontanaNDW-Rchecked October 5, 2026 (opens in a new tab)North Dakota Office of State Tax Commissioner, Income Tax Withholding (Reciprocity)
OhioIndiana, Kentucky, Michigan, Pennsylvania and West VirginiaIT 4 (Section III)checked October 5, 2026 (opens in a new tab)Ohio Department of Taxation, Form IT 4, Employee's Withholding Exemption Certificate (Rev. 01/24, PDF)
PennsylvaniaIndiana, Maryland, New Jersey, Ohio, Virginia and West VirginiaREV-419, Employee's Nonwithholding Application Certificatechecked October 5, 2026 (opens in a new tab)PA Department of Revenue, PA Personal Income Tax Guide: Gross Compensation
VirginiaDistrict of Columbia and KentuckyForm VA-4, line 3 (condition c)Daily commuters onlychecked October 5, 2026 (opens in a new tab)Virginia Tax, Form VA-4, Employee's Virginia Income Tax Withholding Exemption Certificate (Rev. 04/26, PDF)
VirginiaMaryland, Pennsylvania and West VirginiaForm VA-4, line 3 (condition d)checked October 5, 2026 (opens in a new tab)Virginia Tax, Form VA-4, Employee's Virginia Income Tax Withholding Exemption Certificate (Rev. 04/26, PDF)
West VirginiaKentucky, Maryland, Ohio, Pennsylvania and VirginiaWV/IT-104NRchecked October 5, 2026 (opens in a new tab)West Virginia Tax Division, WV IT-104 Employee's Withholding Exemption Certificate and WV/IT-104NR Certificate of Nonresidence (Rev. 03/2023, PDF)
WisconsinIllinois, Indiana, Kentucky and MichiganForm W-220checked October 5, 2026 (opens in a new tab)Wisconsin DOR, Form W-220, Nonresident Employee's Withholding Reciprocity Declaration (R. 7-22, PDF)

DC taxes no nonresident's wages, so it needs no agreement.

Convenience-of-the-employer rules

StateReachesSource
ConnecticutOnly residents of states with their own rulechecked October 6, 2026 (opens in a new tab)Connecticut DRS, IP 2026(1), Connecticut Employer's Tax Guide, Circular CT (PDF)
DelawareEvery nonresident assigned to an office in the statechecked October 6, 2026 (opens in a new tab)Delaware Division of Revenue, 2025 Form PIT-NON Instructions, Non-Resident Individual Income Tax Return (PDF)
New JerseyOnly residents of states with their own ruleNot residents of Connecticutchecked October 6, 2026 (opens in a new tab)NJ Division of Taxation, Convenience of the Employer Sourcing Rule Enacted for Gross Income Tax
New YorkEvery nonresident assigned to an office in the statechecked October 6, 2026 (opens in a new tab)NYS DTF, TSB-M-06(5)I, New York Tax Treatment of Nonresidents and Part-Year Residents: Application of the Convenience of the Employer Test to Telecommuters and Others (May 15, 2006, PDF)
PennsylvaniaEvery nonresident except residents of its reciprocity stateschecked October 6, 2026 (opens in a new tab)PA Department of Revenue, PA Personal Income Tax Guide, Gross Compensation

Days a nonresident may work in a state before withholding

Each rule has conditions: see the state's page and its source.

StateDay limitSource
Alabama30 days a year or fewerchecked October 6, 2026 (opens in a new tab)Alabama Department of Revenue, Withholding Tax Tables and Instructions for Employers and Withholding Agents (revised January 2026, PDF)
Arizonafewer than 60 days a yearchecked October 5, 2026 (opens in a new tab)Arizona Department of Revenue, Withholding Tax
Connecticut15 days a year or fewerchecked October 6, 2026 (opens in a new tab)Connecticut DRS, IP 2026(1), Connecticut Employer's Tax Guide, Circular CT (PDF)
Hawaii60 days a year or fewerPay from an office outside the state onlychecked October 6, 2026 (opens in a new tab)Hawaii Department of Taxation, Booklet A, Employer's Tax Guide (Rev. 2025, PDF)
Illinois30 days a year or fewerchecked October 5, 2026 (opens in a new tab)IDOR, Publication 130 (February 2026) (PDF)
Indiana30 days a year or fewerchecked October 6, 2026 (opens in a new tab)Indiana DOR, Departmental Notice #1, Withholding (effective Oct. 1, 2026, PDF)
Louisiana30 days a year or fewerHome state with no income tax or a similar exclusion onlychecked October 5, 2026 (opens in a new tab)Louisiana Department of Revenue, R-1307 (1/25, revised 10/25) Form L-4E, Exemption from Withholding Louisiana Income Tax (PDF)
Maine12 days a year or fewerchecked October 5, 2026 (opens in a new tab)Maine Revenue Services, 2026 Withholding Tables for Individual Income Tax (revised August 2026, PDF)
Montanafewer than 30 days a yearExactly 30 days not addressedchecked October 6, 2026 (opens in a new tab)Montana Department of Revenue, Montana Employer and Information Agent Guide with Montana Withholding Tax Tables (V4 November 2025, PDF)
Nebraska7 days a year or fewerchecked October 5, 2026 (opens in a new tab)Nebraska DOR, 2026 Nebraska Circular EN, 8-429-1998 Rev. 11-2025 (PDF)
New Mexico15 days a year or fewerchecked October 5, 2026 (opens in a new tab)NM Taxation and Revenue Department, FYI-104 New Mexico Withholding Tax, effective January 1, 2026 (rev. 11/2025, PDF)
New York14 days a year or fewerchecked October 6, 2026 (opens in a new tab)NYS DTF, TSB-M-12(5)I, Withholding on Wages Paid to Certain Nonresidents Who Work 14 Days or Fewer in New York State (July 5, 2012, PDF)
North Dakota20 days a year or fewerHome state with no income tax or a similar exclusion onlyread from an archived copy dated July 8, 2026 (opens in a new tab)North Dakota Century Code, chapter 57-38, section 57-38-59.3 (PDF)
Utah20 days a year or fewerHome state with no income tax or a similar exclusion onlychecked October 6, 2026 (opens in a new tab)Utah State Tax Commission, Publication 14, Withholding Tax Guide (Rev. 04/26)
Vermont30 days a year or fewerEmployers based outside the state onlychecked October 6, 2026 (opens in a new tab)Vermont Department of Taxes, Withholding for Employers
West Virginia30 days a year or fewerHome state with no income tax or a similar exclusion onlychecked October 6, 2026 (opens in a new tab)West Virginia Tax Division, TSD 381, Withholding Information for Employers (Rev. September 2025, PDF)

Where to withhold: two states

Pick your company's state, the state where the employee lives and works from home, and the days a year the employee works at your office. The answer reads each state's rules from the data on these pages.

Your company is in
Employee lives and works from home in
Days a year at your office
Assigned to an employer office in New YorkMatters only in the states with a convenience rule (Connecticut, Delaware, New Jersey, New York and Pennsylvania), and only with office days there.

Income tax withholding

  • Colorado: all wages.

No New York withholding: the employee does no work in New York.

Unemployment

Colorado: the employee works from home there, so the work is localized in Colorado.

Simplified: resident credits, dollar tests, local taxes and a move during the year are not worked out here. Each state's rule and its source are on its page.

Remote employees by state

WORKLIO HCM

Payroll for employees who work from home in another state

Worklio HCM withholds by home and work state, reciprocity included, and handles city and county taxes. We help open state withholding and unemployment accounts when you hire somewhere new, and our registration service can register your employer tax accounts for you. Taxes are calculated, deposited and filed in every state and locality, and when an agency notice arrives, you upload it and our tax team resolves it. State paid leave contributions are withheld, too.

Sources

The agency page or document behind each fact, as checked.

General information, not legal or tax advice. Rules change; confirm current requirements with the relevant agency or your advisor. You remain responsible for your employment taxes and for each state's rules.

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