Paul L. Caron
Dean


Tuesday, June 9, 2020

Employees Working Remotely In A Different State Face A Nasty Tax Surprise

Wall Street Journal Tax Report, Remote-Working From a Different State? Beware of a Tax Surprise:

WSJ 2In March, millions of people had their workplaces scrambled by the coronavirus pandemic and hastily decamped to work remotely. Even with some offices reopening, many hope to prolong the arrangement now that summer is here.

But if you’re doing your job in a state different from your usual one, beware: You may need to file returns and perhaps pay taxes there. So check on your 2020 state taxes now to avoid a bad surprise next year.

Each state tax system is a unique mélange of rules that consider how long a worker is there, what income is earned, and where the worker’s true home, known as domicile, is. But nearly all states that have income taxes impose them on workers who are passing through. In two dozen states, that can be for just one day.

These rules are famous for taxing out-of-state entertainers and athletes like Michael Jordan and Alex Rodriguez. But this year they’ll complicate filings and payments for regular folks working remotely due to the pandemic, such as a tech worker based in Washington state who has temporarily moved back to his parents’ house in Oregon, or a New York banker who has set up a desk in a Florida beach home. ...

So far, 13 states and the District of Columbia have agreed not to enforce their tax rules for remote workers who are present due to the coronavirus, according to American Institute of CPAs spokeswoman Eileen Sherr, who tracks this evolving data. Some states don’t have an income tax, but more than two dozen others—including New York and California, which are famously aggressive—are still set to levy taxes on these remote workers for 2020.

https://taxprof.typepad.com/taxprof_blog/2020/06/employees-working-remotely-in-a-different-state-face-a-nasty-tax-surprise.html

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