Louisiana maintains a Baseline complexity posture regarding the taxation of wages for resident and nonresident remote employees. Here’s a detailed summary:
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Employer Withholding Obligations: Employers in Louisiana are required to deduct and withhold state income tax from the wages of both resident and nonresident employees. The withholding is based on tables provided by the secretary of the Department of Revenue. If an employee claims no liability for income tax through a withholding exemption certificate, the employer is not obligated to withhold taxes for that payment (R.S. 47:112(B) & (N)[1][2]).
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Sourcing of Nonresidents' Wages: A nonresident's wages are sourced to Louisiana if the services are performed within the state. Specifically, wages are allocated based on the time spent working in Louisiana. This includes all types of compensations received as long as they are directly related to work performed in the state (R.S. 47:243)[5].
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Reciprocity Agreements: Louisiana does not have reciprocity agreements with any other states, meaning that nonresident employees must pay state income tax on wages earned while working in Louisiana, regardless of their state of residence.
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De-minimis Thresholds: Louisiana has no de-minimis day or dollar threshold when it comes to the withholding of wages for nonresident employees, therefore even a single day of work or minimal wage would subject the individual to withholding requirements.
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Local/City Wage Taxes: There are no local or city wage taxes imposed in Louisiana. Employers are solely responsible for the state income tax withholding from employee wages, with no additional local taxes to consider.
In conclusion, both resident and nonresident remote workers in Louisiana are subject to the same state income tax withholding regulations, with no local tax obligations and no de-minimis thresholds impacting their wages.