[starz222]

My corporation is an S corporation in Nevada. I have an office in New York with 1 employee in New York. On the employee's W2 on the bottom on line 15, should I list the State as Nevada... or, because they are working for us in NY, should I list New York? And is the corporation and that employee responsible for New York State employment taxes?

[Wildsporty]

For which state did you withhold and pay withholding taxes? The line on the bottom is the state for which you are reporting withholding taxes.

You have a Nexus in New York because you have an employee there and you should have been withholding and paying New York taxes.

If you withheld and paid Nevada taxes than your employee will have to file in Nevada and since he lives in New York he will also have to file in New York. He will most likely get a credit on his New York return for the amounts that he has paid in to Nevada. It will be less than he owes because taxes are higher for the state of New York than they are for the state of Nevada.

For this next year if he is working in New York and lives in New York you need to set up a payroll account there, withhold and pay his taxes according to the New York withholding tables to the state of New York. Since no work is done in Nevada no taxes are due from this employee for the state of Nevada.

He has to pay taxes in New York whether he works in Nevada or not so even if he works in Nevada he still must pay taxes on the income in New York. The reason is because New York taxes residents on all income whether earned in the state or elsewhere.

If you have any more questions please let me know.

Shirley