We have an employee on our payroll who works from home in Colorado. We do not have an office/branch located in this state. The employee's location in our Human Resources system is Southern California.

We are assuming responsibility for processing the payroll effective 5/1/10. The current payroll vendor is withholding CO Income tax. Is this correct?

Part of my responsibilities also include the application process for all state id's where we conduct business. Do we need to apply for a CO state tax id?

Thanks for any assistance.

Regards,
Kathy

If the employee is present in CO to work, the employee must report the income to CO.