[Stylo]

So, like many, I've been exclusively working from home for over a year. I normally work in NYC 2-3 days a week.

With so many positions going remote, yet companies still being based where they are, where does this put state taxes?

It seems really unfair to CT that I paid NY state tax last year. For what, because my company happens to maintain an address there? All of my work was done in CT. The infrastructure of CT supported me. If I represented the state, I'd certainly want this arrangement to be rethought!

Any thoughts on if there will be any shifts to these tax laws?

[SteveM85]

Originally Posted by Stylo

So, like many, I've been exclusively working from home for over a year. I normally work in NYC 2-3 days a week.

With so many positions going remote, yet companies still being based where they are, where does this put state taxes?

It seems really unfair to CT that I paid NY state tax last year. For what, because my company happens to maintain an address there? All of my work was done in CT. The infrastructure of CT supported me. If I represented the state, I'd certainly want this arrangement to be rethought!

Any thoughts on if there will be any shifts to these tax laws?

I think this came up through the H&R Block online filing process. They ask you that and you can adjust it. I don't remember what I did though.

[WouldLoveTo]

Years ago I was up in MA no more than 4 hours a week (1099 worker) and filed a MA state return in addition to the CT one.

A couple of years later I was told that I should have done a Schedule C for all of my clients lumped together under "Office Work" and just paid the CT tax since I live here and my home office is here. I never looked more deeply into it - the next time I did a project for the client it was 100% from home anyway.

[7 Wishes]

If you are your own business/an independent contractor then as WouldLoveTo said you fill out a Schedule C and only pay your home state's tax. The situation you describe is trickier and was not common until the pandemic. In theory, it's no different than when you commute to another state, you fill out a non-resident tax form for the state you "work" in and your "home" state deducts the taxes paid to your "work" state so you are not double taxed.

However, if that were truly so for someone who only works from home, then when someone works for a retail chain you would have to owe taxes to the state they are HQ'd in, which obviously isn't true (for example, my wife works for a chain in NY and lives in NY, but the chain's corporate HQ are in Texas so she obviously doesn't deal at all with Texas state taxes (which I believe ironically are nonexistant, that is they are one of the states with no state income tax), she only fills out a NY tax form (if she were filing seperately and not jointly though unless my job changes sometime in 2021, I will not be filling out both a NY and CT tax form anymore as I did for many years as I only work in NY now)).

I guess ask an accountant or other tax professional or Google this situation or look it up on forums. It's an interesting question/dilemma that again was probably uncommon until 2020.

[Stylo]

Originally Posted by 7 Wishes

If you are your own business/an independent contractor then as WouldLoveTo said you fill out a Schedule C and only pay your home state's tax. The situation you describe is trickier and was not common until the pandemic. In theory, it's no different than when you commute to another state, you fill out a non-resident tax form for the state you "work" in and your "home" state deducts the taxes paid to your "work" state so you are not double taxed.

However, if that were truly so for someone who only works from home, then when someone works for a retail chain you would have to owe taxes to the state they are HQ'd in, which obviously isn't true (for example, my wife works for a chain in NY and lives in NY, but the chain's corporate HQ are in Texas so she obviously doesn't deal at all with Texas state taxes (which I believe ironically are nonexistant, that is they are one of the states with no state income tax), she only fills out a NY tax form (if she were filing seperately and not jointly though unless my job changes sometime in 2021, I will not be filling out both a NY and CT tax form as I did for many years as I only work in NY now).

I guess ask an accountant or other tax professional or Google this situation or look it up on forums. It's an interesting question/dilemma that again was probably uncommon until 2020.

I am pretty sure since I'm W2 and our company is in NYC that I would pay NY state tax.

My question was more, will these laws change with this new reality.

I'd rather give my tax income to CT!

[7 Wishes]

Originally Posted by Stylo

I am pretty sure since I'm W2 and our company is in NYC that I would pay NY state tax.

My question was more, will these laws change with this new reality.

I'd rather give my tax income to CT!

I'm pretty sure too that you are correct, and maybe the laws will change, but one good argument for changing the law is when you work for a chain you don't pay tax to the HQ state but there's probably some law that covered that vs your situation, like if you have more than x locations you only pay state tax for the location you work at.

[robr2]

There is a case - NH vs. MA - that the Supreme Court is considering hearing. The MA Department of Revenue issued an emergency order early in the pandemic stating that NH residents who normally work in the state but were working from their homes in NH during the MA lockdown would still be required to pay MA income taxes.

Under normal circumstances, those employees would be able to deduct their MA taxes from their own state taxes. Since NH doesn't have a state income tax, they don't have that opportunity.

[WouldLoveTo]

Originally Posted by Stylo

I am pretty sure since I'm W2 and our company is in NYC that I would pay NY state tax.

My question was more, will these laws change with this new reality.

I'd rather give my tax income to CT!

You don't pay a portion to both states? I thought that was how this worked, but since I also had CT clients the year I had the MA client, I did pay CT as well.

[7 Wishes]

Originally Posted by WouldLoveTo

You don't pay a portion to both states? I thought that was how this worked, but since I also had CT clients the year I had the MA client, I did pay CT as well.

Maybe as your own business/independent contractor, but not in the employee/W2 world


As someone who from 2009 to 2019 worked in CT and lived in NY (and for more than one employer in CT), they always only took out their own state's tax. Then when it came tax time it would look like I owe NY a lot of tax and get a huge refund from CT. But because of the deductibility of another state's taxes when you have a situation involving multiple states' taxes, this would "even this out" (I'd still get a small refund from CT and owe a little to NY, complicated by the fact that I had a small p/t 2nd job in NY from 2011 to 2018).


I assume the same thing happens in reverse for the somewhat more common "live in CT, work in NY" situation.

[Stylo]

Originally Posted by WouldLoveTo

You don't pay a portion to both states? I thought that was how this worked, but since I also had CT clients the year I had the MA client, I did pay CT as well.

No, I pay NY income tax, and because it's higher than CT income tax, there's nothing paid to CT.