Louisiana Establishes Threshold for Nonresident Income Tax Withholding
For tax years beginning on or after January 1, 2022, employers are not required to withhold Louisiana income tax from nonresident employee wages for services performed within Louisiana, unless the nonresident employee spends more than 25 days performing employment duties for the employer in Louisiana [S.B. 157, L. 2021].
If, during the calendar year, the number of days an employee spends performing employment duties in Louisiana exceeds the 25-day threshold, an employer is required to withhold and remit taxes for every day in the calendar year, including the first 25 days, on which the employee performs employment duties in Louisiana. The threshold does not apply to professional athletes, professional entertainers, public figures, qualified production employees (related to the motion picture industry), and staff members of professional athletic teams.
Currently, employers must withhold for all nonresidents regardless of the number of days worked in Louisiana. Louisiana does not have reciprocal withholding agreements with any states.
APA’s Multi-State Taxation Compliance Hot Topic is a useful site to learn more about nexus and withholding requirements when employees live in one state and work in another. It provides information and links to additional resources, including links to federal legislation and APA publications and education.
Lia Coniglio, Esq., is Managing Editor of PayState Update and Manager of State Payroll Information Resources for the APA.