Posted by Lorraine Cohen and John Jennings on May 29, 2014
A long-standing, widely known — but sometimes ignored — tax requirement calls for income tax to be paid to the jurisdiction where work is actually performed. So, organizations with employees who travel to other states or other countries for business purposes should, in most cases, be tracking their employee’s travel in order to remit taxes to those locations where compensation reporting and withholding is required. (Requirements vary in a few states and, by country, according to treaty policies.) Even if employers fail to withhold and remit the required taxes, employees themselves are obligated to do so. With taxing authorities paying more attention to this requirement, and with the potential (and precedence) to incur substantial penalties for noncompliance, organizations would be wise to evaluate their current practices and remediate any shortfalls — the sooner the better.