Multi-State Payroll Taxes   State Unemployment:  is generally paid to the state where the business is located.  It doesn't matter where the work is completed or where the employee resides.  That is true for the five reciprocal states listed below, as well as many other states.  But, there are exceptions to this rule (like Utah, for instance), so please check with us about specific states. State Withholding:  depends on where the employee resides as well as where he or she works.        Reciprocal States:  Maryland, Pennsylvania, Virginia, West Virginia and Washington, DC      For employees who live in one of the five reciprocal states (listed above) and work in one of those five reciprocal states, state taxes should be withheld for the state of residence.  Otherwise, state taxes should be withheld for the state where the employee works.  For more info see:   Non-resident taxes Employees temporarily working out of state:  The rule above applies if the work lasts more than two weeks.  For work out of state lasting less than two weeks, there is no requirement to withhold for the new state.