How do you pay taxes if you work remotely? (insurance, refund, credit)
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Say, the company is located in NYC but I work from home in Boston. How should the taxes be paid?
It is full time employment, not a contract position. Will I have to pay more than someone who lives in New York?
I don't think this is right. I think one is deducted New York state taxes, then at the end of the year file Massachusetts taxes and use the New York state taxes paid as a full credit, making MA taxes zero given that NY tax rates > MA tax rates.
If your residence is in MA and your earned income is in NY, crescent 22 is right. You have to file in both MA and NY and use your tax credits from NY to reduce your MA tax. You will end up paying state income taxes equal to the higher rate of the two states.
People who work in one state but live in another have a tax liability to their state of residence. It doesn't matter if you physically move your body from state to state.
Federal taxes are obviously straight-forward, but the matter of state taxes does depend on where you live/work. If you lived in Virginia but worked in DC for instance, you would pay taxes to VA but nothing at all to DC. In some other locales, you would pay taxes only to the jurisdiction where you worked, and in still others you would have to file and perhaps pay in both. Massachusetts however does offer credits for taxes paid to other states and jurisdictions. From Mass.gov...
If any of the income reported on this return is subject to taxation in another state or jurisdiction and you have filed a return and paid taxes in the other state or jurisdiction, complete the Schedule Z, Part 2, line 10 worksheet and enter the amount of credit on line 10 of Schedule Z. Do not include taxes paid to the U.S. government. (This credit does not apply to city or local taxes.) You are allowed to claim a credit for taxes paid to the following jurisdictions: (a) other states in the U.S. including payments made under the Rhode Island temporary disability Insurance Act; (b) any territory or dependency of the U.S. (including Puerto Rico, the Virgin Islands, Guam, the District of Columbia); or (c) the Dominion of Canada or any of its provinces (less any U.S. credit amount allowable from U.S. Form 1116).
Federal taxes are obviously straight-forward, but the matter of state taxes does depend on where you live/work. If you lived in Virginia but worked in DC for instance, you would pay taxes to VA but nothing at all to DC. In some other locales, you would pay taxes only to the jurisdiction where you worked, and in still others you would have to file and perhaps pay in both. Massachusetts however does offer credits for taxes paid to other states and jurisdictions. From Mass.gov...
If any of the income reported on this return is subject to taxation in another state or jurisdiction and you have filed a return and paid taxes in the other state or jurisdiction, complete the Schedule Z, Part 2, line 10 worksheet and enter the amount of credit on line 10 of Schedule Z. Do not include taxes paid to the U.S. government. (This credit does not apply to city or local taxes.) You are allowed to claim a credit for taxes paid to the following jurisdictions: (a) other states in the U.S. including payments made under the Rhode Island temporary disability Insurance Act; (b) any territory or dependency of the U.S. (including Puerto Rico, the Virgin Islands, Guam, the District of Columbia); or (c) the Dominion of Canada or any of its provinces (less any U.S. credit amount allowable from U.S. Form 1116).
What could be simpler?
I wonder if the "pay in both" case really exists? I certainly do not know and there are 50*49 combinations (just for the states).
I wonder if the "pay in both" case really exists? I certainly do not know and there are 50*49 combinations (just for the states).
As I said above, when I worked in IL and lived in NY four years ago, I had to pay both.
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