State Unemployment Requirements - Resident vs. Work State

State Unemployment Tax (SUTA) is owed to the state where the employee was hired to do the work.

  • SUTA regulations relating to coverage state are uniform across states since they were originally designed by an agency of the Federal government. However, annual limits do vary from state to state. An individual need meet only one limit if the SUTA state changes during the year.

  • Workers' compensation liability does not necessarily match SUTA liability. W/C is generally owed to the state where the work is currently being performed; this may not be the same state to which SUTA will be paid.

  • Using Employee Master Maintenance, each employee's tax responsibility can be individually recorded. If SUTA is owed to the resident state as in examples #1 and #3, set "resident sui" to Taxable and "work sui" to Exempt. Conversely, if the SUTA is owed to the work state as in example #2, set "resident sui" to Exempt and "work sui" to Taxable.

State Unemployment Requirements – Examples

Example 1

Reason

Washington resident is hired as a salaried employee for sales activity in a number of states. SUTA for this employee will be owed to the state of Washington.

Salaried permanent employees generally are covered under the resident state even though they may spend a significant amount of time in one or more other states.

Example 2

Reason

Washington resident is hired as an hourly employee for work on an Oregon job and it is expected that employment will terminate at the end of the job. SUTA for this employee will be owed to the state of Oregon.

Hourly employees hired for a specific project generally are covered under the state in which the work will be performed.

Example 3

Reason

Washington resident is hired as an hourly employee for work on an Oregon job and it is expected that employment will continue beyond the end of the job. SUTA for this employee will be owed to the state of Washington.

Hourly permanent employees generally are covered under the resident state even though they may spend a significant amount of time in one or more other states.