3. Question: Investigate your state's income tax withholding law (or that of some other state assigned by your instructor), and find the answers to the following questions: Answers: a. Who must withhold the tax? Employers are responsible b. How are covered employers and covered employees defined? "covered employees" are defined as any person c. Are there any reciprocal agreements into which the state has entered? If so, describe them d. How is the withholding rate determined? e. What payments are subject to withholding? f. What payments are not subject to withholding? g. Are there any employee withholding exemptions? h. What methods of withholding are permitted? i. Describe each of the returns required by the state. j. What kinds of information must be retained by employers in their withholding tax records? k. What penalties are imposed for failure to com-ply with the withholding law? 1. Are any employers required to deposit their withheld income taxes through electronic funds transfer (EFT)? If so, what requirements does the state impose