Do you have employees in states outside of California? We can help you fulfill the payroll tax requirements for multistate commerce.Does your business have employees working in other states? In your situation, if the employee provides Form ILW5NR, you can use the state listed on the form for the employee's state income tax. A wage claim starts the process to collect on those unpaid wages or benefits. Employers are expected to withhold state income tax from an employee's wages if that employee is subject to state income tax unless noted below. Securing your today and tomorrow. Human smuggling, human trafficking, national security, or public safety. File corrections promptly to avoid penalties. No, you can't sue your previous employer for not withholding income taxes.