Utah Withholding laws & HR compliance analysis

Utah Withholding: What you need to know

An employer must withhold state income tax if it is (1) doing business in Utah or obtaining any income from Utah sources and (2) paying wages to individuals who perform services for that employer, within or outside the state of Utah, on an employer/employee basis. Employers are to determine the amount to withhold on the basis of the employee’s federal W-4 form and the Utah income tax withholding schedules or tables.
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Any employer that does business in Utah 60 days or less during a calendar year may be exempt from the withholding requirements. The employer must receive advanced approval from the Tax Commission. Approval certifies the employer is exempt. Thereafter, if the employer does business exceeding 60 days, the employer is liable for all taxes due during the period of exemption. An additional 30-day exemption may be granted if good cause is shown.
“Wages” are defined as payments or compensation for services performed by an employee for an employer. This includes payments in a form other than cash. Utah defines wages by the Internal Revenue Code, Section 3401(a).
Federal law specifically exempts the following wages from withholding, but wages may be withheld if the employer and employee agree:
• Newspaper carriers under the age of 18 delivering to customers.
• Newspaper and magazine vendors buying at fixed prices and retaining excess from sales to customers.
• Household workers.
• Agriculture workers who are not subject to FICA withholding.
• Ordained ministers for compensation earned in the performance of their services as a minister.
• Amounts paid for casual employment (less than $50 paid and less than 24 days worked in that quarter or in the preceding quarter). ...

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