What is a nonresident certificate?

Together with the factors of whether a company has nexus and the determination of whether the states in which the employee is working and living have a reciprocal agreement, the nonresident certificate is a critical piece in determining what taxes an employer has to withhold from an employee’s paycheck. nonresident certificates are forms used to indicate that an employee living in one state and working in another state that has a reciprocal agreement with their resident state has chosen to be exempt from withholding income tax in their work state. The employee completes the nonresident certificate and files it with his or her employer indicating that the employer should not withhold tax on wages earned in the work state.

However, not every state has a nonresident certificate. For scenarios such as this, state rules on whether the resident and nonresident states withhold on wages earned out of state and whether nonresident states do or do not have state withholding tax apply when determining what taxes employers should withhold from their employees’ paychecks.

Interested in getting access to all nonresident certificates? Get in touch today and ask about Symmetry Payroll Forms.