For tax years beginning on or after January 1, 2023, employers will not be required to withhold Utah income tax from nonresident employee wages for services performed in the state, unless the nonresident employee spends more than 20 days performing employment duties in Utah [S.B. 39, L. 2022].
An employer must calculate the number of days to determine if the threshold has been reached by including the days the nonresident employee is present in the state to perform employment duties. A day means any period of time during a calendar day that an individual is present in the state, unless that presence is solely for transportation throughout the state.
If a nonresident employee is present in Utah to perform employment duties for more than 20 days during a calendar year, the employer is liable for all the tax that it would have been required to deduct and withhold.
The 20-day threshold does not apply to the wages received by certain nonresident employees, including professional athletes, entertainers, construction workers, and key employees.
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Lia Coniglio, Esq., is Managing Editor of PayState Update and Senior Manager of State Payroll Information Resources for the APA.
