No State Tax withheld!

Where do you work?

If you work in Indiana, and your employer does not have a business location or do business in Ohio, he is under no obligation to withhold Ohio state income tax for you. As an Ohio resident working in Indiana, you do not have a tax liability to Indiana; therefore, he is under no obligation to withhold Indiana tax either. You will be subject to a penalty for underpayment of estimated taxes to Ohio. Next year you should make quarterly estimated tax payments to Ohio so that this doesn't happen again. Of course, if you worked for this employer IN OHIO, he would have nexus with Ohio and be required to withhold Ohio taxes for you. Katie in San Diego

What about unemployment insurance? There's no mechanism that I know of for an individual to pay unemployment insurance, so how is such an employee covered? Since no contribution is made in either state, it seems that would be problematic. Isn't an employer obligated to pay unemployment insurance for all employees? TM

If the employee works in Indiana, he is properly covered for unemployment insurance in Indiana. The fact that the employer doesn't withhold Indiana income tax doesn't mean he isn't covered or reported for unemployment. Under the Uniform Unemployment Insurance Code, an employee is covered for unemployment in the state where he performs all or most of his services, not where he lives. If the employee works in Ohio, the employer should be registered as an employer with Ohio and cover him for unemployment insurance purposes there. Katie in San Diego