S-Corp Payroll Set-Up

[anu31402]

I have a single-owner S-Corp domiciled in GA. The owner-employee works mainly in NC and KY. He gets 1099-Misc from these two states that are paid in his company name. I want to set up payroll for him.
Your advice is appreciated

[JohnH]

Chances are the corp is going to have to qualify in both states and file tax returns in all 3 states, allocating income on the separate state returns. This will mean multiple K-1's at the state level.

Likewise, it will be necessary to allocate salary & wage payments on the W-2 form based on the time worked in each state, meaning registration in each state for payroll tax withholding. The S&W payments will also flow into the state tax returns of the corp when calculating the allcoation formulas. In some cases, this ends up with the undesired effect of more than 100% of the corp income showing on the Federal return being allocated to the states when you add them all up.

[anu31402]

Thanks JohnH. Does that mean he needs to get Certificate of Authority for his company in each State? Since he isn't sure of working in the same state each year? It looks like this is going to be a mess. He is a Medical Dr.

[BOB W]

Thanks JohnH. Does that mean he needs to get Certificate of Authority for his company in each State? Since he isn't sure of working in the same state each year? It looks like this is going to be a mess. He is a Medical Dr.

As long as he is an S Corporation, yes, every state that he works in.

[Gary2]

I wonder which is worse, dealing with the corporation in multiple states or having to get licensed in multiple states. Other than states with explicit reciprocity, my intuition says that it's harder for a doctor than for a lawyer to practice in a different state.

[JohnH]

There are probably all sorts of issues here. Everything from licensing in different states to how Professional Corporations operate in each state. Then there is the matter of malpractice insurance from one state to another. Sounds like he needs a legal constultation as well.