Taxes are withheld in the state in which the work is done. So if an employee has a domicile in Colorado but works in Montana, deduct Montana State Tax and Montana UI.
The only state that Montana has a Reciprocity Agreement with is North Dakota. Then the employee can give us a certificate and we can withhold and pay North Dakota state taxes, no Montana state taxes, but we still have to pay Montana UI.
The employee might still be liable to pay state tax in their domiciled state. They may be double taxed depending on the state, or they may get a credit for the wages earned in Montana. But the employer obligation is to withhold and pay tax based on the location that the work was done.
Want to print your doc? This is not the way.
Try clicking the ⋯ next to your doc name or using a keyboard shortcut (
