Does an out of state employee pay income taxes, UI and Disability state taxes to the state they live in or to the state where their employer/company resides?

It's nice to have you join this thread, @territodd.

I'm here to lend a hand in managing your employees and taxes in QuickBooks Online Payroll.

You might consider checking your employee's address to determine which state your employee has to pay. This way, we'll verify if your employee belongs to the state of Missouri (MO) or Tennessee (TN).

Once you determine the state or local taxes to pay and file, we can make the necessary changes. Here's how:

1. Go to the Payroll menu and select Employees.
2. If your employee is new, select Add an employee. Otherwise, select your employee from the list.
3. From Employment details, select Start or Edit. Select or add the work location where you're required to pay State Unemployment Insurance. If you have remote employees, the work location may be different than where your employee physically works. Then select Save.
4. From Tax withholding, select Edit. Go to the State withholding section.
5. When you see a Local Taxes or Other taxes section, choose the applicable taxes and enter the rates.
6. If you or your employee are exempt from any taxes (not common) from Tax Exemptions, select the applicable tax(es).
7. When done, click Save.

However, if verified that it is for state of MO, I recommend contacting our QuickBooks Online Payroll Support. This way, they can pull up your account in a safe environment and help you with the best process to handle these taxes.

Furthermore, I'll be adding these articles to help you handle your employee's taxes in QBO Payroll:

• Set up employees and payroll taxes in a new state
• Set up local taxes in QuickBooks Online Payroll

I'll be around if you need further assistance with your payroll taxes. I'm very eager to help. Take care always!