Work from home different state tax

Working From Home? It Could Cost You!

If would like to recommend one I'd be greatly appreciative. Staying compliant while hiring new employees in different states can be taxing — and it can take time away from running your business. If a reasonable possibility exists, I'd be more proactive i. But if New York's income taxes are higher than those of his home state, than he's paying higher taxes than his neighbor who doesn't commute out of state. Small Business - Chron. Depending on which text editor you're pasting into, you might have to add the italics to the site name. Need an employee to be able to focus on a particularly sensitive task?

In our post “Living in One State, Working in Another“, we explained how to file state taxes if you work in one state but live in another. However, with all the (exciting) advances in technology, more and more individuals are trading in their commutes to the office to instead work remotely from home.

Unemployment Insurance -- State Resident

That's all fine and dandy, but exactly how much of your income is going to be attributable to NC? You can probably figure it by determining the number of days you actually work there, but it's still a little fuzzy.

Normally, if you have a business trip to visit your corporate headquarters, it wouldn't even count as working in that city--it's just a business trip. By the way, you would be a non-resident of NC, since you are a resident of Washington.

Either, your NC company will withhold NC income taxes from your paycheck as if you live in NC all year long--or it wil not withhold anything as you are a resident of Washington and no income tax should be withheld for that.

If they withhold, you absolutely must file a NC tax return to receive a refund for the time you spent working in Washington. This is why you want to keep track of all the time you spent in NC so that you can prepare a proper allocation. If they withhold nothing--as if you worked in Washington all year long, I would not file a NC return. You can try, but it will be difficult.

With no withholding, you're being treated as not being in the state at all. I would just drop it. This is where reality and law don't see eye to eye. I'm pretty hard core about paying what you owe, but if you're company doesn't withhold, it's saying that you're not in the state. If you go and file a return saying you were there but the company didn't withhold--you're setting them up for a corporate audit. Taxes really confuse me, and I can't seem to bring all this together in terms of state-by-state rules, what information is accurate, and what information is most up to date.

In any case, you need to file a nonresident tax return in NYS because you have New York-sourced income. See more details on this page from the NYS treasury department:. This credit is non-refundable, i. Your obligation to the state of New York, if any, is a facts and circumstances question. The federal courts have weighed in on this issue a number of times.

The bottom line has been wherever you butt is sitting when you do the work, that is where you are going to be taxed! Even if you occasionally go to New York and stay a couple of days rewriting code, the courts have considered this "de minimus" and thereby making you not subject to New York tax.

Occasionally employers misinterpret these events and withhold income tax in their state and not the state in which you reside. It is your duty, and right, you object to that happening and you should do so to protect your interests.

Based upon the facts as you have described them, your employer must withhold DC income tax. If your employer mistakenly withholds New York state income tax, DC can and will levy your employer for the DC state income tax that should have been withheld AND for the state in the case district unemployment insurance tax they should have paid on your behalf. You should not be burdened with filing a New York state income tax return to get back New York state income tax that was withheld from your pay check s.

Plus, having to file a non-resident New York state income tax return puts you "in the system. The courts are replete with cases where a resident of one state got tangled up with another states tax department and ended up having to go to court to undo liens and levies, etc.

If you get it right to state with you will avoid a myriad of possible problems. You and the District of Columbia have a vested interest in DC tax being properly withheld. You would be subject to an underpayment penalty is you had to first file a non-resident New York return and get back you New York withholding so that you could then pay you DC income tax. In essence, unless you have plenty of money in the bank, you would have to quickly, in February, file a non-resident New York state income tax return to receive a refund by April 15th so you could pay your DC income tax on the due date.

Then penalty is Most importantly, Should you be terminated, you are in "No Man's Land" regarding your ability to receive unemployment benefits. Please turn JavaScript back on and reload this page. Please enter a title. You can not post a blank message.

Please type your message and try again. This discussion is locked. Post a new topic 8 Replies Latest reply on Mar 31, 3: My company is headquartered in New York but my staff is located in other areas of the United States. When I applied for payroll it was explained that their salaries deductions would be based on their states.

Do I need a business license? I'm not really certain on how to pose the question. However, I just want to know will I get hit with major taxes by employing staff in different states other than the main company? I have the same question Show 0 Likes 0. This content has been marked as final. If I understand your question, you're asking if the fact that you have employees who reside and work in other states obligates you to those states for anything other than their wage reporting and withholding requirements.

Do you have physical locations where business is conducted in those states? If so, then you may be required to register with the state as a foreign company, and to comply with local licensing regulations if any apply. If those employees deliver taxable products or services to customers in those states, you may also be responsible for collecting and reporting state sales tax.

If you can be more specific about your business and what those employees do, a more definitive answer can probably be offered. I'm a magazine in New York. Now, one employee is in Delaware, does emarketing. The others are in Dallas, TX doing marketing and production. They all work from home but have my equipment in their houses. Let me know if you need more info.

Remote Employees, Welcome to this web site. Do you have an Accountant?? Another suggestion might be an "Outside Payroll Service". They would take care of the payroll and also know about taxes on employees in different states. I don't have an accountant, lawyer or insurance agent.

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You don't pay taxes to New York State because you have zero New York Source Income. You are NOT performing services in New York State. You are NOT carrying on your occupation in New York State. So, if you were to work from Florida, you'd pay no state income taxes. Oct 25,  · State income tax - Company based in NC but work from home in WA I have a job offer from a company in NC. I will be working from home (Washington) % of the time. There will be travel to the company headquarters (%).Status: Resolved. Working From Home? It Could Cost You! By Robin Hardman. Photo credit: Wikipedia. H.R. Flexible Work Arrangements Multi State Worker Tax Fairness Act Tax Law Connecticut.