If an employee is coming into the US on a L-1A Visa, what taxes are the employee and employer liable for and what are they exempt from paying?

If the income is U.S.-sourced, he and the employer are liable for FICA (Social Security and Medicare) taxes, plus federal and state income tax.

If the L-1A employee's income is FOREIGN-sourced, and he stays for LESS than 183 days in 2011, then he is EXEMPT from all U.S. taxes in 2011, provided he leaves before the 183rd day.

If he stays beyond the 183rd day, he becomes liable for federal and state INCOME taxes for 2011 on the foreign-sourced income. The FICA tax begins on 1 January 2012.

L1 is work visa so you will pay all the taxes just like citizens and residents of U.S. If your stay exceeds 183 days, you will also report your worldwide income during the period you are in U.S.