Nexus

Nexus is used within the United States to indicate that the employer has a business presence in a particular state, and therefore is subject to income taxes within that state. Generally, nexus is determined if the employer owns or leases property in the state, derives income from within the state, has capital or property in the state, or employs personnel in the state (in activities that exceed "mere solicitation").

Nexus is an important element in SPF because without it an employee could be served incorrect payroll forms. If nexus is not specified, the SPF API will act as if a user has nexus in every state. This could result in an employee completing more payroll forms than they need, but will also make sure they complete all required withholding forms for their tax scenario.

The SPF API forms and guided-flows endpoints support the ability to specify Nexus. Below shows how a user can specify which states they have nexus in.

Sample Request

{
    "homeAddress": {
        "streetAddress1": "11 S Union St",
        "city": "Montgomery",
        "state": "AL",
        "zipCode": "36130"
    },
    "workAddresses": [
        {
            "streetAddress1": "64 N Union St",
            "city": "Montgomery",
            "state": "AL",
            "zipCode": "36130"
        }
    ],
    "nexus": [
        "AL",
        "LA",
        "MS"
    ]
}

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Nexus does not impact Canadian form determination

Nexus is only used within SPF United States. Canada has different form logic and does not use Nexus.