How is local tax withholding determined for employees who work in multiple jurisdictions?

• A. Withholding is based on the primary work location and local rules; may require allocations by jurisdiction.
• B. Withholding is always based on the employee's home address.
• C. Withholding is determined by the most favorable jurisdiction for the employee.
• D. Local withholding is optional for multi-jurisdiction employees.

Answer: (A)

Local withholding is determined by where the work is actually performed and the local rules that apply to that location. The starting point is the primary work location—the place where most or the essential duties are performed. If an employee splits time across multiple jurisdictions, the employer may need to allocate earnings to each location and withhold according to the local rates and rules for each jurisdiction. Home address isn’t the controlling factor for local withholding, and you don’t choose the most favorable jurisdiction; withholding must follow the rules of the places where the work occurs. Some jurisdictions require proportional allocations based on days worked or other allocation methods, and the result may involve withholding for multiple localities.