Due to the COVID-19 pandemic, there was a drastic shift to remote work, and one year later, many are still working remotely. Some people are working remotely in their home state, and others in states in which the decided to shelter in place. Even as states continue to open up their economies over the coming months, it does not change the fact that employers have been allowing employees to work remotely for over a year in different states. Allowing employees to work remotely from states in which they do not normally work can create a host of issues for employers, but the two big tax issues relate to nexus and income tax.
First, will the presence of an employee working from home create taxable nexus for the employer in that state?
Second, for income tax purposes, which state is owed income tax when an employee is working remotely from an out-of-state location? Is it possible that states could have contradictory rules, creating a double tax situation for many employees? (Spoiler alert: yes!).
In a straightforward and easy-to-understand manner, highly regarded state tax practitioner, Timothy P. Noonan, will help you understand how states have responded to the new remote work environment and identify potential issues for both individuals working remotely and their employers.
Publication Date: April 2021
Designed For
All CPAs, enrolled agents, tax return preparers, tax attorneys, and other practitioners working with clients on multistate tax compliance.
Topics Covered
- Telecommuting and Nexus
- Remote Work and Personal Income Tax: NY Case Studies
- Remote Work and Personal Income Tax: Multistate Issues
- Remote Work and Income Tax Apportionment
Learning Objectives
- Describe the corporate and sales tax implications of having employees work in different states
- Identify the states that have issued differing nexus rules as a result of COVID-19
- Recognize and gain a practical understanding of where (in which states) an employer may have sales and/or corporate income tax nexus
- Identify the number of states that have a "convenience rule"
- Recognize how to advise clients on sourcing of wages received while working remotely
- Differentiate how sales tax nexus effects states
- Recognize factors considered as an "other factor" under the TSB-M Factors analysis
- Describe how many states have a "convenience rule" and have adopted one
- Recognize which states do not have a state income tax
Level
Basic
Instructional Method
Self-Study
NASBA Field of Study
Taxes (2 hours)
Program Prerequisites
None
Advance Preparation
None
Instructor
Timothy Noonan
Tim focuses his practice in the state and local tax area. His work primarily involves New York State and New York City tax litigation and controversy. Over the past 20 years, he has handled more than 1,500 personal income tax, sales tax, corporate tax, or other New York tax audits. Tim also has handled about 100 cases in New York’s Division of Tax Appeals.
Tim leads the firm’s Tax Residency Practice and he is one of the leading practitioners in this area of the law. He has handled some of the most high-profile residency cases in New York over the past decade, including a 2014 win in the Gaied case, one of the first New York residency cases to ever reach New York’s highest court. Tim also co-authored the 2018 edition of the CCH Residency and Allocation Audit Handbook and Contesting New York State Tax Assessments (Fourth Edition), published by the New York State Bar Association, and he authored the New York Tax Litigation chapter in Thomson Reuters’ Commercial Litigation in New York State Courts treatise. He is often quoted by media outlets, including The Wall Street Journal, The New York Times and Forbes, on residency and other state tax issues.
Tim also has handled a significant number of residency and sales tax issues in other states, including work with many national and international clients on multistate compliance or voluntary disclosures. He has also appeared before the Connecticut Supreme Court and the Michigan Court of Appeals in litigated matters and is admitted to practice law in Connecticut.