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Hello, I'm a regular full-time employee of a large company in California. I work from home for them and live full-time in a state which does not have income tax. Do I pay taxes on the income based on my employer's location? Thank you.
You will need to file a non-resident California return and pay income tax on income sourced to that state. If your home state imposes an income tax, you would have to file tax returns in both states, but you would be entitled to a credit for tax due in your home state for taxes paid to the other. Since your home state does not impose an income tax, you will only owe tax to the state of California.
Some states have reciprocity with neigboring states that allow you to only be required to file in your home state. This doesn't appear to apply to your situation, since your home state does not impose an income tax.
One of the question is your "Large" company really based in Calf? Where are they Incorporated? Most are "based" in delaware, A great state for Corporation to be 'based' in. Your HR / Payroll software sould be able to Base you in your Home State. (I note you post to the Vancover list alot). If you are in Canada it may be different.
Yes, my company is based in San Francisco. I wonder why they just couldn't stop deducting California income tax since they know I'm not in California. Guess it doesn't work that way. At any rate, I got a nice refund from CA. My understanding is there isn't supposed to be a big delay on state returns as there is going to be on the federal refunds? I'm used to getting my refund direct deposited within 10 days and am disappointed that won't be happening until probably at least late Feb. :-(
"The delay is necessary because the IRS needs time to program its systems to accommodate tax breaks included in a compromise tax bill President Obama signed last week."
If you aren't working in CA at all, your employer should not be withholding CA taxes. State taxes are based on where you WORK, not live unless that state has a reciprocity agreement with another state(s)
Sourcing of wages for telecommuting employees.—As more employers utilize employees who telecommute from their homes in another state, either on a full-time or part-time basis, issues relating to which state may tax what portion of these employees' wages become more prevalent. Absent a compact between states regarding the sourcing of wages of each other's residents, the states use one of two tests to source wages of telecommuting employees: the physical presence test or the convenience/necessity test.
Under the physical presence test, employee income is allocated to the employee's location at the time the work was performed. For example, an employee who works from his home in State A two days a week, and from his employer's office in State B three days a week, would have 40% of his income sourced to State A and 60% of his income sourced to State B.
Under the convenience/necessity test, all employee income is allocated to the employer's location unless the employee is able to prove that she performed her work away from the employer's location due to employer necessity, rather than employee convenience.
Only four states (New York, New Jersey, Nebraska, and Pennsylvania) utilize the convenience/necessity test.
Same case here, I am home based in FL and work for a company based in CT. The work is done in FL and abroad. I visit the CT location once every quarter. I consulted with several people , including someone who works for a payroll processing company and said that I should not pay CT taxes. Since FL is no tax state I should not be paying state tax at all.
My husband works from our home in AZ for a company that has three corporate locations; 1 in NY, 1 in NC and 1 in CO. When he was hired, he was hired through the NC location, worked for 1 week in the CO location in 2010 and has worked from home ever since. He has not gone to any of the locations for over a year. His employer pays his state income tax to NC and refuses to change it to AZ which is our state of residence.
We have tried several times to change the allocation of the state taxes. The employer states they will only pay the state income tax to one of the three locations in which they are based; thereby forcing us to file additional returns and pay more in taxes than we should be paying.
I am confused as to the legality of this. How can an employer do this and what can an employee do about it? I see this becoming more and more prevelant as companies move to alternate work stations but fail to understand why the employee should be in this situation. Can anyone enlighten me?
Why not call your attorney generals office since if the compny is doing it incorrectly that is who will enforce it on them in the end.I know one person who does the same and his employer takes no state taxes out and he files it himself as if he were self employed.
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Just don't get it
