Additional Steps for Out-of-State Employees – End Out-of-State Employee
Use this procedure if an employee is no longer living or working in Oregon or Idaho, or if an out-of-state (OOS) employee is transferring to a different agency or separating from state service.
It is recommended the losing agency delimits out-of-state records or reverts to Washington tax areas and tax authorities upon a change in Business Area. The gaining agency should create new out-of-state records when applicable by following the Additional Steps for Out-of-State Employees – Set Up Out-Of-State Employee user procedure.
The only exception is if the gaining agency has communicated to the losing agency that the employee will continue living and/or working out-of-state and the gaining agency is fully configured for the applicable OOS taxes and has requested the employee’s OOS tax infotype records remain active.
Be cautious when transferring out-of-state employees across different business areas mid-period. Out-of-state taxes process similarly to other items in HRMS where the costs for the full pay period are rolled over to the gaining agency. Because of this, the employee will redline if the losing agency has out-of-state taxes turned on for their portion of the pay period and the gaining agency is not set up for out-of-state tax processing. To remedy this scenario, the losing agency should end all out-of-state taxes as of the last full pay period or pay check with that agency; then manual adjustments can be entered for the partial pay period as needed.
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Step 1
Work with your personnel administration processor to verify that the employee’s Permanent residence and Out of State Work Location records are reflected correctly in the Addresses (0006) infotype. Refer to the Addresses user procedure as needed. Once you have received confirmation from the personnel administration processor, you may move onto the next steps.
TIPS:In order to process payroll, employees must have an active Permanent residence address in the Addresses (0006) infotype.
All employees who are working outside of Washington should have an Out of State Work Location address record. If the employee was working in Oregon or Idaho but will now work in Washington, then the Oregon or Idaho Out of State Work Location record can be delimited. If the employee will now be working in another state outside of Washington, Oregon, or Idaho, then the Out of State Work Location address should be updated to reflect the new work location.
In addition to the employee’s permanent residence and OOS work location address records, the personnel administration processor may also need to update the employee’s Telework/Flex Work (Employee) (9106) and/or Duty Station Address (9105) infotype records as needed. Refer to the Telework/Flex Work (Employee) and Duty Station Address user procedures for more information.
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Step 2
If the employee no longer lives in Oregon or Idaho, no longer meets Oregon’s or Idaho’s residency requirements for tax purposes, is transferring to a different state agency, or is separating from state service:
Complete the following procedure:
TIPS:Use this procedure to set the employee’s Residence Tax Area to Washington (WA).
Washington, Oregon, and Idaho are the only states with tax areas configured in HRMS. For employees who reside outside of Washington, Oregon, or Idaho, the tax area should be set to WA and any out-of-state taxes will then need to be calculated and collected manually. Setting the tax area to Washington will turn on federal taxes for the employee, unless they are systematically excluded from federal taxes.
Refer to the Payroll Out-of-State Employee Tax Resources page for more information on manual tax processing in HRMS.
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Step 3
If the employee no longer works in Oregon or Idaho, is transferring to a different state agency, or is separating from state service:
Complete the following procedure:
TIPS:Use this procedure to end the employee’s Work Tax Area record.
Currently, Washington, Oregon, and Idaho are the only tax areas configured in HRMS. An active Work Tax Area (0208) infotype record is not needed for employees living and working in Washington or another state outside of Oregon or Idaho.
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Step 4
If the employee’s work is no longer localized to Oregon or Idaho, is transferring to a different state agency, or is separating from state service:
Complete the following procedure:
TIPS:Use this procedure to set the employee’s Unemployment State tax authority to Washington (WA). Washington, Oregon, and Idaho are the only tax authorities configured in HRMS for this infotype.
For employees whose work is localized outside of Washington, Oregon, or Idaho, the tax authority should be set to WA; any out-of-state taxes will need to be calculated and collected manually, and Washington tax types will likely need to be exempted on the employee’s Other Taxes US (0235) record.
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Step 5
Check if the employee has an active Add. Withh. Info US (0234) infotype record with a valid Empl.override group entered.
If no active record or if the active Empl. override group selection is no longer accurate, complete the following procedure:
TIPS:Use this procedure to create or maintain the employee’s LNI risk classification if they are subject to Washington Workers' Compensation taxes. If the employee's Unemployment State (0209) tax authority is set to Washington (WA), then the employee must have an active Add. Withh. Info US (0234) record with a valid Empl.override group entered (unless exempted from the WA LNI taxes on the Other Taxes US (0235) infotype).
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Step 6
If the employee’s tax exemptions need to be maintained or updated:
Complete the following procedure:
TIPS:Use this procedure to create or maintain any employee and/or employer tax exemptions based on the tax types that were assigned from the Residence Tax Area (0207), Work Tax Area (0208), or Unemployment State (0209) infotypes. Check to see if current exemptions need to be updated or new exemptions need to be added.