Click on Employees module on the left navigation pane

Click on Employees

Search for the employee, click on ellipsis at the far right, then select 'Edit employee' OR you can click on the employee's name
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On the employee profile, click on the 'Profile' tab
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On the profile section, click on the pencil icon to edit
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Click on State of Residence field and change to the desired state from the drop-down list

Click on save