If you telecommute to a job in another state where you never have a working presence or to one of those states and meet an exception you would file a return only in your resident state. I live NJ but work in NY. Since March and because of the virus i have only been working at home in NJ.
Shouldn't my company be taking out NJ taxes instead of NY taxes? They told me no because it is a NY law. Who is correct? New York's general rule is that if you're a non-resident of NY working remotely for a NY employer, your income is taxable by NY if you're working remotely by your own choice, rather than because your employer requires it.
This is known as the "convenience of the employer" rule. To turn it around, if you're a non-resident of NY working outside NY because your employer requires it, your income is not taxable by NY. In that case, you would file a non-resident return to the state listed on your W-2 form in addition to a resident return to your home state.
Your resident state will give you a dollar-for-dollar tax credit for any income taxes you have to pay to the other state. If you live in one state but have the opportunity to work in another state, say at the beach lucky you! You should also check the tax laws for the state in which you are planning to work in order to determine whether or not they will require you to pay non-resident taxes for working in their state.
Generally, these tax laws are based upon income thresholds and time spent working in that state. Unfortunately, if you are an employee who receives a W-2 from your employer, then you cannot deduct a home office on your tax return. Recent updates to tax law have eliminated this miscellaneous itemized deduction for employees, but it is still available for the self-employed or contract workers who receive a NEC.
Additionally, expenses that no longer qualify as tax deductions for W-2 remote employees include:. As a resident, you pay state tax and city tax if a New York City or Yonkers resident on all your income no matter where it is earned. As a nonresident, you only pay tax on New York source income, which includes earnings from work performed in New York State, and income from real property located in the state.
If you are a nonresident, you are not liable for New York City personal income tax, but may be subject to Yonkers nonresident earning tax if your income is sourced to the city of Yonkers. For a list of what does and does not constitute New York source income, plus other information, see:. If you are a nonresident whose primary office is in New York State, your days telecommuting during the pandemic are considered days worked in the state unless your employer has established a bona fide employer office at your telecommuting location.
There are a number of factors that determine whether your employer has established a bona fide employer office at your telecommuting location. In general, unless your employer specifically acted to establish a bona fide employer office at your telecommuting location, you will continue to owe New York State income tax on income earned while telecommuting. A person who lives in one state but works in another may have tax liability in both states, but typically will receive a tax credit in their state of residence to eliminate double taxation of that income.
If you were a full-year or part-year resident of New York State and you had income sourced to and taxed by another state you may claim a nonrefundable resident credit against your New York State tax. This credit is allowable only for the portion of the tax that applies to income sourced to and taxed by the other taxing authority while you were a New York State resident.
You are a New York City resident if:. Your New York City domicile does not change until you can demonstrate with clear and convincing evidence that you have abandoned your city domicile and established a new domicile outside New York City. For income taxes purposes, your Yonkers resident status depends on where you were domiciled and where you maintained a permanent place of abode during the taxable year.
If you maintain a permanent place of abode in Yonkers and spend days or more in Yonkers, you are considered a Yonkers resident. Are wages earned by a resident of Detroit, who is working from home telecommuting for a company in another city, taxable by Detroit?
Are wages earned by a non-resident of Detroit, who is working from home telecommuting at a location outside of the city, taxable by Detroit? I am a nonresident of the City of Detroit and earned income while both in the City of Detroit, and outside the City of Detroit. How do I file? What documentation is required for a nonresident to allocate telecommuting wages to nontaxable income?
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