Said It Here

Employee moved to another state and wants to work remotely

Having an employee work remotely from another state triggers immediate corporate registration and tax withholding obligations, such as creating a filing nexus with aggressive states like California. Setting up these legal compliances without a payroll provider can cost more than the value of the work itself, making it difficult to keep the employee on legally.

Overview
People affected2 accounts across 1 forum
Workarounds found1 item attempted
Community agreement10 total upvotes

What people tried

Every workaround mentioned in the threads below. We haven’t tested any of them — and nobody here is claiming they worked.

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  1. 1
    Avoiding paying the former employee to work remotely from the other state
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In their words

Unedited, grouped by where they were said, most upvoted first within each place, each linked to the thread it came from.

r/Accounting2 people · September 2026

“That's a tough spot, the California nexus alone is enough to make any small business owner's eye twitch”source ↗

“Have you already checked if the remote work triggers a registration requirement in Cal? Even a single employee working from there can create a filing obligation, and the state is pretty aggressive about it”source ↗

“I'd be worried less about the payroll processing and more about the registration and tax withholding side. If you're not set up with the EDD yet, that's where things get messy fast”source ↗

tackyabsence_745 · r/Accounting · 6 upvotes

“Getting setup to pay them legally in CA is going to probably cost you more than the value of the work being done, possibly several times over.”source ↗

TwoAlert3448 · r/Accounting · 4 upvotes

Where this came up

r/Accountingcompliancepayrollremote worktaxes

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