State Income Tax and working from home

[frenzyrider]

Originally Posted by pharpe

I work for a consulting company and we travel extensively so we have a very strict team of tax auditors to help us make sure we are in compliance with tax laws. It doesn't matter where your company's offices are located. You are taxed in the state that you are physically located while working.

+ 1 and might I add there is a minimum number of hours required. My firm collected tax from my pay check based on my location and "equalized" it at the end of the year.

[mezman]

Originally Posted by frenzyrider

The bolded part is incorrect. I worked for a top management consulting firm and it was clear black & white on ink that if you spend time in another state for business then you DO OWE that state's income tax of course subject to minimum hours. Very common actually. However, the firm will "equalize" it by reimbursing it.

So you said exactly the same thing I did and I'm wrong... interesting.

At any rate, none of that is applicable to the OP's question. Again client billing is revenue for your employer who presumably has operations in Texas. So as long as you don't cross the border and go onto the client's state to work you don't owe tax since your income source is from your employer not the client.

The OP's wife's income source is from her employer who is in another state so income tax to that state is due (or least all my prior research has lead me to that conclusion but things could have changed in three years). This all changes if the OP's wife's company has operations in Texas since they might be able to change her employment to be under the company's Texas tax ID but this wasn't stated as the case so I didn't factor that in.

This is all just speculation until the OP talks to a tax professional.

[frenzyrider]

Originally Posted by mezman

So you said exactly the same thing I did and I'm wrong... interesting.

At any rate, none of that is applicable to the OP's question. Again client billing is revenue for your employer who presumably has operations in Texas. So as long as you don't cross the border and go onto the client's state to work you don't owe tax since your income source is from your employer not the client.

The OP's wife's income source is from her employer who is in another state so income tax to that state is due (or least all my prior research has lead me to that conclusion but things could have changed in three years). This all changes if the OP's wife's company has operations in Texas since they might be able to change her employment to be under the company's Texas tax ID but this wasn't stated as the case so I didn't factor that in.

This is all just speculation until the OP talks to a tax professional.

My bad. I think you are right. I was wrong in assuming that working for a client in another state does not mean on-premise always and you explained that further down.

[Back2Texas]

I work from home, for a company headquartered in another state. My office location is listed as "home office" (as opposed to an office or cube in a company office) and so I believe they withhold taxes based on my home address. I am not 100% sure of the details, but I know for sure that I paid state income tax when I was living in California (same company/same job), and now I don't.

My company has offices in many locations and employees with a variety of working arrangements, so I think they just know how to do things. If your wife's company doesn't have a lot of experience with people working outside the STL area, it might be more work to get them to do things right.

[lardo5150]

She checked with Accountant and her HR/Payroll people.
She will not have state income tax taken out cause she lives and works in Texas.

[MckinneyOwnr]

Originally Posted by lardo5150

She checked with Accountant and her HR/Payroll people.
She will not have state income tax taken out cause she lives and works in Texas.

You could have stopped reading at the second post.

(Frankly, that would have been good thing after reading all the misinformation by people in this thread!)

[Moey91]

I work from home also. My company is in Chicago so my paychecks automatically deduct for IL state tax, but at the end of the year I claim non resident. Hope that helps!

[Moey91]

Wish I could get them to stop but I guess it must depend on how that company and state operates.