Working From Home? It Could Cost You!

The poor suckers coming in from Connecticut are one of the best examples. You've got a bit of a fuzzy situation. One piece of good news: Some of the products we feature are from partners. Chat or rant, adult content, spam, insulting other members, show more. On the other hand, if John is regularly meeting with Illinois customers or potential customers, which is something he could not do if based in New York, and then New York will not tax those wages. With no withholding, you're being treated as not being in the state at all.

So, we included the amounts in our state income taxes for the State of Georgia where we lived for the years However, we moved back to Florida in mid Since Florida does not assess income taxes, we have not filed a state income tax return for the years

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So how can you make sense of it all? And what happens if you live in more than one state? Or join the military? Or have a really low income? Well, to answer these questions, we need to start at the beginning and understand what exactly the income tax is, well, taxing. How Financial Planning Software Works. How to Apply for a Car Loan. How State Income Taxes Work.

For many states, the largest source of revenue is state income tax. Thanks to our computer age employees may no longer need to report to a fixed location in order to perform services for their employer. Telecommuting, a work arrangement where employees typically work out of their home, has become increasingly accepted and popular. However, this arrangement may have unexpected state tax consequences when the employer is based in a state other than where the employee lives and works.

For the employee, the issue is which state or states taxes their wages. He receives a steady paycheck and is issued a W John lives in Illinois, but Elsewhere has its corporate headquarters in Florida. Does the result change if John works solely out of his home? Forty-one states impose a tax on personal income.

If so Resident income tax or non-resident income tax? Is there any way for me to avoid paying State income tax? Thanks for your help. NC has non-resident income tax. Do I need to file for the non-resident income tax? Are you sure you want to delete this answer? You've got a bit of a fuzzy situation.

There's "the law" and there's "the reality. That's all fine and dandy, but exactly how much of your income is going to be attributable to NC? You can probably figure it by determining the number of days you actually work there, but it's still a little fuzzy.

Normally, if you have a business trip to visit your corporate headquarters, it wouldn't even count as working in that city--it's just a business trip.

By the way, you would be a non-resident of NC, since you are a resident of Washington. Either, your NC company will withhold NC income taxes from your paycheck as if you live in NC all year long--or it wil not withhold anything as you are a resident of Washington and no income tax should be withheld for that.

If they withhold, you absolutely must file a NC tax return to receive a refund for the time you spent working in Washington.

State of Employment

This isn't really fair to telecommuters and it impacts a company's bottom line as well, since they have might have to pay state taxes for even one lone employee working from home in another state. That's why HR , the Multi-State Worker Tax Fairness Act of was introduced; if passed, it will prohibit states from imposing income taxes on nonresidents who telecommute. The remaining 33 states and the District of Columbia tax income much the way the federal government does: They tax higher levels of income at higher rates. At the federal level, for example, a single taxpayer pays 10% on the first $9, of income, and then 15% of anything between $9, and $37,, 25% of anything between $37, and $91,, and so on. You only have to file and pay taxes in your home state of residence (where you are working for your employer remotely). Please let us explain further. Actually, it doesn't matter where you employer is located, as far as your personal income taxes are concerned.


Oct 25,  · State income tax - Company based in NC but work from home in WA I have a job offer from a company in NC. I will be working from home (Washington) % of the time. There will be travel to the company headquarters (%).Status: Resolved. If you work in one of these nine states, but live in one of the 41 states (plus the District of Columbia) that do impose state income taxes, you will generally pay only resident state income taxes for the state . But if New York's income taxes are higher than those of his home state, than he's paying higher taxes than his neighbor who doesn't commute out of state. He could be working from home nearly every day, being protected by the local fire and police departments, and yet be paying higher taxes to make these services available somewhere else.

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