Paul L. Caron

Tuesday, November 3, 2020

States Are Taxing Nonresidents Who Barely Spent Time In Them This Year On Their Full 2020 Income

Reset Work, US States Are Taxing People Who Barely Spent Time In Them This Year On Their Full 2020 Income:

Some Americans will be facing big tax bills this year from states where they spent very little time living or working. Delaware, Nebraska, New York, and Pennsylvania have traditionally claimed income taxes from people who aren’t residents but work in offices there—and Arkansas and Massachusetts this year joined their ranks.

This has meant that some workers have had to pay state taxes in two states on the same income. The issue is even more acute this year as people working remotely because of the pandemic will have spent even less time in the states they’re having to pay taxes to.

This week New Hampshire accused Massachusetts of “attempting to pick the pocket of our citizens” and filed a case with the US Supreme Court over this issue. And New York updated its FAQ documents to make even clearer that it expects remote workers to pay up.

I spoke with Professor Edward Zelinsky of Cardozo Law School in New York City, a leading expert on double taxation.

Zelinsky, who lives in Connecticut, unsuccessfully sued New York state in 2003 because he didn’t believe he should have to pay New York income taxes for days he worked from home. Here's a transcript, edited for clarity.

Tax, Tax News | Permalink