04/04/2022

Tax Update |

How remote work can impact income taxes

Remote work has become more common in recent years, and the COVID-19 pandemic has resulted in employers realizing that many jobs can be done from home. Some remote workers even work in a different state than where their employers are based. These employees may have opted to move to states with lower or no income taxes, but they — and other remote employees now working across state lines — may find themselves shouldering unexpected state income tax liabilities.

Convenience Rule

Generally, you incur state income tax liability based on where you’re physically present while earning the income. So, logically, if you’re living and working in a different state than where your employer is located, you’d expect to pay state income taxes only in the state where you live.

But the “convenience rule” applies in the following seven states: Arkansas, Connecticut, Delaware, Massachusetts, Nebraska, New York and Pennsylvania.

Please select this link to read the complete article from OSAP Member VonLehman CPA & Advisory Firm.