It’s up to the taxpayer to determine which states they do, or could potentially, owe taxes to.Īnother note is that unlike freelancers or independent contractors, employees who receive a paycheck or federal W-2 form from one employer are not eligible for home office deductions, according to the Tax Cuts and Jobs Act of 2017. Other states tax based on wages earned, while others simply don’t have an income tax.ĭepending on what laws in various states are, there could be tax liabilities in another state if that’s the location of a company. Some states allow nonresidents to work there for 30 days without a requirement for withholding.īut there are 23 states that don’t allow any work days from nonresidents and start billing from the first day, so to speak. Workers who decided to set up shop in another state could end up paying more in taxes to multiple states, according to CNBC.Įach state has its own set of laws and rules in terms of remote workers filing taxes. More than ever due to the pandemic, that is leading to some tax complexities. Whether it’s been employees from the north who have migrated to residences in the south during the winter, or people choosing to work remotely from what are normally vacation homes, many have taken the opportunity to work remotely in a separate state from where they reside. A common aspect of the COVID-19 pandemic over the past two or so years has been more employees working remotely, but that doesn’t necessarily mean all those people were working from their homes.
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