Telecommuting, working from home tax consequences.
Remote work may trigger a series of state and local tax issues and impose undue accounting burden.
02/05/2022
The company that is employing the remote workers may be required:
- to register in each of the state or locality where its staff is working from,
- to register with each of the state and local tax agencies where its staff is working from;
- to pay tax to each of the state and local tax agencies where its personnel is working from.
The employees may be required to file tax:
- in the state where their employer would normally have them work;
- in the state and locality where their home is and they’re working from.
The pandemic has brought remote work. More individuals are working remotely than before the pandemic. Workers like the flexibility that it provides: no commute, etc. If you’re a business owner and you’ve decided (or are considering) to move to a fully remote workforce or a hybrid approach, you should factor these state and local tax ramifications.
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