1. Go to Payroll, Setup, Payroll Options and enable the option for 'Allow Multiple Tax Profiles in Data Entry' on the Additional tab.

2. Go to Payroll, Setup, Tax Profile Maintenance and create the necessary tax profiles. Each tax profile should have both a Work and a Residence location and there should be a tax profile created for each work/residence combination that will apply to the multi-state employees in question.

3. Go to Payroll, Main, Employee Maintenance and select the first multi-state employee to set up. Go to Taxes tab and set each of the tax profiles to be used on payroll entries for this employee as the Default Tax Profile once, then leaving the desired tax profile set as actual default when finished. This step is necessary so that the required filing status and other related tax calculation settings can be set for each locality below, otherwise the tax calculation engine will not have the necessary information for accurate calculations.

4. Go to Payroll, Main, Payroll Data Entry and create a payroll entry for employee from step 3. Enter a line of earnings and, with that line highlighted/selected, set the appropriate Tax Profile Code in the 'secondary grid' section below the lines of earnings and deductions. Note that the tax profiles available to choose from are only those that have been applied as the Default Tax Profile for that employee as described in step 3.