Some of our clients are located in the DC Metro area, loosely referred to as a “tri-state area.” Because of this, tax laws are often confusing. Just to set the record straight, here’s some information you might find useful.
DID YOU KNOW…that according to the Virginia Department of Taxation:
…If you are a MARYLAND business that has employees WHO WORK OUT OF THEIR VIRGINIA HOMES, you have to withhold Virginia income tax because your employees are by definition, performing services in the state?
…Conversely, if your company only has an office in MARYLAND, but some of your employees are VIRGINIA residents who COMMUTE TO WORK ON A DAILY BASIS, you are not required to withhold Virginia income tax from their wages. That is because your company is not paying wages to employees for services performed in Virginia. You may choose to withhold the tax as a courtesy to your employees, but it is not required.
For more facts on Liability for Withholding for Virginia, speak to your tax accountant or refer to the Virginia Department of Taxation’s Website: http://www.tax.virginia.gov/