More than a few commuters from Connecticut and New Jersey have dreamed about skipping the daily slog to their office in New York and working at home.
Unfortunately, this can also turn out to be more costly, thanks to New York’s tax code, which in some cases double-taxes nonresidents who work for companies based in New York but occasionally telecommute.
New York’s “convenience of the employer” rule taxes nonresidents as if they came to the office every day, even if they worked at home part of the week, unless they can prove their employer required them to telecommute. Yet they must also pay income tax in their home states for work they did there.
New York is the only state that aggressively enforces its tax code this way; most states use a “physical presence” test that lets workers pay taxes in proportion to the amount of time spent working in each state.
The rule has critics, because it penalizes some workers from out of state and also dilutes efforts to promote telecommuting that might ease congestion on the highways and trains in the New York City area.
Read more.
Photo by Thomas McDonald.
Work An Hour, Pay Tax On 2
January 21, 2008 by Rich | 1 Comment
In Taxes, Telecommuting, Work at Home
Related Posts
Comments
Leave a Reply
Steve on January 21st, 2008 at 11:13 am
Ugh!!!
Man, if this isn’t the pinnacle of taxation going awry! While I can empathize, at least California has NOT gone psycho and done this to us … yet … I wouldn’t put it past anyone here in my home state!
What to do? People believe out there that taxing people who are “rich” is OK. And, in the end, those who try to make a better living for themselves get _caught_ like telecommuters there in New York.
“Honey, get me my hat! We’re gonna go out and dump so tea in the East River!!!”
:)
Take care, and THANK YOU for finding these sorts of stories for us!
Steve