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Old 02-16-2016, 11:14 AM
 
67 posts, read 52,549 times
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So currently I am working for a company in Indiana but working remotely (telecommuting) 100% of the time from my home. The only time I might step foot in Indiana would be a week or at the annual Christmas party. For some reason, the payroll company that my employer uses started taking out Indiana state income tax and even county taxes where the employer is located.

Previously, i worked 100% remote for a company in Illinois and never had this problem and never paid any Illinois state income tax. Now for some reason I am having this problem.

To my knowledge if i reside and physically work in Florida 99.9999% of the time(with the few exceptions that I mentioned) then i should not be held liable for any income state tax. I know that New York and a few others apply the 'convenience rule' but Indiana is not one of them as far as I can tell.

I am currently waiting to hear back from someone from H&R Block to verify but can anyone else confirm(especially if you work remote) that I should not have to pay any state income tax? Again I don't know why i didn't have this issue with my previous employer in Illinois but now i am with Indiana.

Thanks..
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Old 02-16-2016, 11:27 AM
 
Location: Seminole County, FL
10,652 posts, read 7,381,899 times
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Interesting... You should get that refunded on your tax return, I would think.

I worked remotely for a company based in NC, and now work for one in Chicago... Neither one of their payroll departments charged me State Income Tax, as my physical location is Florida.
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Old 02-16-2016, 11:27 AM
 
Location: South Florida
4,888 posts, read 5,639,836 times
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My friend and neighbor works for Deloitte and according to her.. the law is about where you physically are.
(Her tax changes.. when she's in Florida no tax, but when she goes up to NY for even a day.. she is taxed. Of course this is all on the honor system and my friend takes it very seriously.)

Hope this helps.
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Old 02-16-2016, 11:49 AM
 
25 posts, read 34,823 times
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Yes, you are not required to pay state income tax.

Couple fun facts, you don't even need to live in Florida to take advantage of this, just to have your 'primary residence' here. How you achieve this by owning, living the first 2 years primarily in this residence (which doesn't even mean the majority, just more than any other residence). After that 2 year block, you just need to adhere to the 2 parts per 5 block. Meaning in a 5 year span, you need to spend most of your time for 2 years. This can mean being completely absent 3 years, and in the other 2 years just spending more time versus your other residences.

Another fun fact, if you make you money overseas, and were there for more than 90days, you withhold up to 100k of income from FEDERAL INCOME tax.

So take advantage of your WFH, also write off your house as an expense for your business. Remember your income is not what it shows on your W2 or 1099 but what it shows on your W2/1099 minues your expenses which in your case would be your house (mortgage if you have it) etc.
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Old 02-16-2016, 11:52 AM
 
8,112 posts, read 2,942,241 times
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States taxing authority ends at their borders. That is unless they have a reciprocal agreement with another state. Can't imagine that is the case here. They can tax you for that week while you are in Indiana assuming they have no de minimus service statute.

If they have health insurance for employees it would be interesting what state they claim you under.
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Old 02-16-2016, 11:56 AM
 
67 posts, read 52,549 times
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thanks for all the responses. This is what I thought all along. Indiana does have reciprocal agreements with bordering states(Kentucky, Wisconsin, etc) but obviously this doesn't include Florida. Also i didn't take out health insurance with them so that isn't even an issue.

@vacoder - didn't New York pass a law that basically says that remote employees pay New York State tax even if you don't live there?
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Old 02-16-2016, 12:02 PM
 
25 posts, read 34,823 times
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Quote:
Originally Posted by geeksweep View Post
thanks for all the responses. This is what I thought all along. Indiana does have reciprocal agreements with bordering states(Kentucky, Wisconsin, etc) but obviously this doesn't include Florida. Also i didn't take out health insurance with them so that isn't even an issue.

@vacoder - didn't New York pass a law that basically says that remote employees pay New York State tax even if you don't live there?
I have a 1099 client based in Manhattan and I do not pay NYC state income tax.
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Old 02-16-2016, 12:07 PM
 
Location: SW Florida
10,257 posts, read 7,470,611 times
Reputation: 15585
Quote:
Originally Posted by geeksweep View Post
So currently I am working for a company in Indiana but working remotely (telecommuting) 100% of the time from my home. The only time I might step foot in Indiana would be a week or at the annual Christmas party. For some reason, the payroll company that my employer uses started taking out Indiana state income tax and even county taxes where the employer is located.

Previously, i worked 100% remote for a company in Illinois and never had this problem and never paid any Illinois state income tax. Now for some reason I am having this problem.

To my knowledge if i reside and physically work in Florida 99.9999% of the time(with the few exceptions that I mentioned) then i should not be held liable for any income state tax. I know that New York and a few others apply the 'convenience rule' but Indiana is not one of them as far as I can tell.

I am currently waiting to hear back from someone from H&R Block to verify but can anyone else confirm(especially if you work remote) that I should not have to pay any state income tax? Again I don't know why i didn't have this issue with my previous employer in Illinois but now i am with Indiana.

Thanks..
Not from H&R block here, but I have done part time contract work for a company physically located in Sacramento, CA for about 17 yrs, and I have been located FL all that time. My employer has never taken any deductions from my pay- I take the income taxes, SS and Medicare deductions from the annual earnings at tax time, but FL has no state income tax. I think it was the first year I had that contract job that the state of CA sent me a bill for their state income tax, which I showed to our tax guy, partly for giggles and partly to see if he thought there was anything I should do about it. His response was also a laugh, and his comment was "well, good luck to them trying to collect this". Then he informed us we could ignore this bill as one pays any applicable income tax to the state in which they live. I never got another bill from them after that.
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Old 02-16-2016, 12:09 PM
 
8,112 posts, read 2,942,241 times
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I used to live in NJ and work in NY. The rule then was I was taxed by NY state and NY city on days I was physically there. I do not know if any new law has been instituted

I am not a tax expert but I would think it would be against interstate-commerce trade laws for a state (say NY) to impose taxes on a non-resident (say NJ) while that person is not inside their borders. That is unless an agreement was in place between the two states.

I also am a telecommuter for a company in VA and I do not pay state tax. My guess is Indiana owes you some money.
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Old 02-16-2016, 12:14 PM
 
67 posts, read 52,549 times
Reputation: 40
Quote:
Originally Posted by Travelassie View Post
Not from H&R block here, but I have done part time contract work for a company physically located in Sacramento, CA for about 17 yrs, and I have been located FL all that time. My employer has never taken any deductions from my pay- I take the income taxes, SS and Medicare deductions from the annual earnings at tax time, but FL has no state income tax. I think it was the first year I had that contract job that the state of CA sent me a bill for their state income tax, which I showed to our tax guy, partly for giggles and partly to see if he thought there was anything I should do about it. His response was also a laugh, and his comment was "well, good luck to them trying to collect this". Then he informed us we could ignore this bill as one pays any applicable income tax to the state in which they live. I never got another bill from them after that.
yeah as a contractor or 1099 i can see them not taking out any taxes at all. But i am now a Full time employee who works remote full time.(i.e, so far this year never went into the office and like i said i am sure that at some point ill go in for a week or something to catch with everyone)
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