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How did this work for you? Were there any problems when you did your W-2's for your employees or other issues that you ran into. I have a similar situation. We're an electrical contractor in SD; have a project in ND and 2 Employees that live in SD, work on a project in SD and the one in ND. ND has W/H; SD doesn't. Waiting to hear about your problems if there were any. Thank you for your comments.