working remotely across state lines

[chiver78]

I'm about to enter the job hunting world again, and am considering 100% remote opportunities located wherever the wind may blow. I live in MA, and have no idea what to expect for personal tax impact if I'm working for a company located elsewhere. I feel like this is important information to know as I negotiate salary and other details in the process. 

TIA! 

[taz157]

My DH worked across states lines and he was 100% remote. He was taxed in his resident state, not the state the company was located in..

[Cheesy FL-Vol]

Jun 7, 2023 17:48:52 GMT -5 taz157 said:

My DH worked across states lines and he was 100% remote. He was taxed in his resident state, not the state the company was located in..

[msventoux]

Those rules can get pretty complex and there is really no consistency in rules between all states.  Generally, you would be taxed in your resident state and not the state the employer is in.  But there are a few states with a convenience rule that allows states to tax employee wages earned in other states for employers in their states unless the employer stationed the out of state employees at those locations for the employer’s convenience that meets certain criteria.  Some states have a sort of credit if the income is taxed in another state, but others may not and it’s possible the income could be taxed separately in each of the states.  

ETA:  This is an older CNN article that may still be relevant.  There are a lot of employers that hire remote workers without doing it correctly in terms of state withholding, unemployment insurance, etc.  Often times hiring remote workers can create nexus in the employees resident state for that company and employers don’t want to deal with figuring out their own new tax burden in the employee home state so ignore the problem until that state’s departments of revenue/labor catch up with them.  

[chiver78]

Jun 7, 2023 18:23:44 GMT -5 msventoux said:

Those rules can get pretty complex and there is really no consistency in rules between all states.  Generally, you would be taxed in your resident state and not the state the employer is in.  But there are a few states with a convenience rule that allows states to tax employee wages earned in other states for employers in their states unless the employer stationed the out of state employees at those locations for the employer’s convenience that meets certain criteria.  Some states have a sort of credit if the income is taxed in another state, but others may not and it’s possible the income could be taxed separately in each of the states.  

ETA:  This is an older CNN article that may still be relevant.  There are a lot of employers that hire remote workers without doing it correctly in terms of state withholding, unemployment insurance, etc.  Often times hiring remote workers can create nexus in the employees resident state for that company and employers don’t want to deal with figuring out their own new tax burden in the employee home state so ignore the problem until that state’s departments of revenue/labor catch up with them.  

this is actually what's making me ask the question. during COVID when everyone was WFH, NH actually sued MA b/c NH residents working for MA employers were still being taxed MA taxes as if they were still in the office. NH famously does not have income taxes (Live Free or Die is the state motto) and they called bullshit on the policy in place at the time. 

[minnesotapaintlady]

I agree with the above that it is going to vary based on what two states you're talking about because they all have different laws.  MN taxes non-residents on income made in MN, but we have reciprocity with ND.  If you live in ND you just pay to ND and don't file with MN. However, if you live in WI and work in MN, you have to file with both since we have no reciprocity.  WI does give a credit for taxes paid to other states so you're not getting double taxed.

[chiver78]

Jun 8, 2023 9:56:00 GMT -5 minnesotapaintlady said:

I agree with the above that it is going to vary based on what two states you're talking about because they all have different laws.  MN taxes non-residents on income made in MN, but we have reciprocity with ND.  If you live in ND you just pay to ND and don't file with MN. However, if you live in WI and work in MN, you have to file with both since we have no reciprocity.  WI does give a credit for taxes paid to other states so you're not getting double taxed.

but does that change if you're working remotely? if I lived in NH and drove to MA to work in an office/plant, that's where people were paying MA income taxes. that's what NH sued over, when the NH residents weren't driving down to MA anymore and the work was being done in NH. 

[minnesotapaintlady]

Jun 8, 2023 10:01:17 GMT -5 chiver78 said:

Jun 8, 2023 9:56:00 GMT -5 minnesotapaintlady said:

I agree with the above that it is going to vary based on what two states you're talking about because they all have different laws.  MN taxes non-residents on income made in MN, but we have reciprocity with ND.  If you live in ND you just pay to ND and don't file with MN. However, if you live in WI and work in MN, you have to file with both since we have no reciprocity.  WI does give a credit for taxes paid to other states so you're not getting double taxed.

but does that change if you're working remotely? if I lived in NH and drove to MA to work in an office/plant, that's where people were paying MA income taxes. that's what NH sued over, when the NH residents weren't driving down to MA anymore and the work was being done in NH. 

It looks like MN only taxes if you are physically present in the state while working (which would be a PIA to figure if you commuted some of the days).  I'm sure with this every state is different too.   

[resolution]

It's going to vary based on the two states. In my case, I have worked remotely for over 10 years in a state that didn't have reciprocity agreements with my residential states. I've been paying income tax to the state my employer is based in, and then claiming that as a credit against taxes in my residential state. So it has ended up not costing me any more in taxes, but I have higher tax preparation expenses.