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Tax question

Mr. Perfect
Offhand, I can only recall one member on here that is a CPA (@neacpa) but I believe that some others of you may know the tax code changes related to COVID. Here is the scenario which raises a question. I work for a company that has offices all over the country. The office I normally report to is in a state that has an income tax, and I am normally required by that state (Idaho) to pay income tax. I reside in a state (WA) that does not have an income tax. Am I still required to pay the income tax while my official status is work from home?
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8 comments

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  • mogley98
    Good question < I don't know but I was curious enough to look


    The general rule for telecommuting is that you file a return only in the state that you are physically present in when you perform services. However, some  states have a much harsher rule. Those states are DE, NY, NJ, NE and PA. They may also include OR. These states tax wages in their state as if performed in the state if the telecommuter is working in another state merely for their convenience instead of necessity. NY has been particularly aggressive about this. A discussion on the issue centering on NY from the Journal of Accountancy is here.  If you telecommute to a job in one of those states and don't meet an exception (similar to NY's in the article) they would expect you to file a non-resident return reporting and paying tax on your income from that state, and filing a resident return in your own state reporting all of your income and claiming a credit for tax paid the other state. In such a situation, you would want tax withheld from wages for the state where you telecommute to. 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.  

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  • Mr. Perfect
    mogley98 said:
    Good question < I don't know but I was curious enough to look


    The general rule for telecommuting is that you file a return only in the state that you are physically present in when you perform services. However, some  states have a much harsher rule. Those states are DE, NY, NJ, NE and PA. They may also include OR. These states tax wages in their state as if performed in the state if the telecommuter is working in another state merely for their convenience instead of necessity. NY has been particularly aggressive about this. A discussion on the issue centering on NY from the Journal of Accountancy is here.  If you telecommute to a job in one of those states and don't meet an exception (similar to NY's in the article) they would expect you to file a non-resident return reporting and paying tax on your income from that state, and filing a resident return in your own state reporting all of your income and claiming a credit for tax paid the other state. In such a situation, you would want tax withheld from wages for the state where you telecommute to. 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.  


    Good find. Thanks man!
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  • SW0320
    Not sure about Idaho but I have seen notices from several states around us that sent out notices to companies informing them  that employess telecomuting from another state does not excuse the company from withholding tax to the state where the employee is usually assigned. 

    So even if you are telecommuting from Washington if your office is in Idaho you are still subject to Idaho taxes.  
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  • spasmcreeksrun
    no fooling ...many years ago i put down the cash value paid on a co-op patronage instead of the full amount..took em 3 years to catch it but the amount plus the 13% fine was a kicker.....never made that mistake twice...
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  • neacpa
    Mr. Perfect, I will give my opinion on the situation, but I would encourage you to inquire of a CPA in Idaho as states have different rules.  First, this on an assumption you are receiving a W2 instead of a 1099.  Typically, most states tax individuals on residency or "source of income".  If your W2 income has already been established as a "source of income" from Idaho, then I would presume that Idaho would take a stance that income would be taxable for Idaho even if you no longer coming to that physical location for a brief period of time.
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  • Butchdog2
    I have employees that live in TN and work for me in NC. They pay NC income tax. As the song goes, "money for nuthing"
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  • Mr. Perfect
    neacpa said:
    Mr. Perfect, I will give my opinion on the situation, but I would encourage you to inquire of a CPA in Idaho as states have different rules.  First, this on an assumption you are receiving a W2 instead of a 1099.  Typically, most states tax individuals on residency or "source of income".  If your W2 income has already been established as a "source of income" from Idaho, then I would presume that Idaho would take a stance that income would be taxable for Idaho even if you no longer coming to that physical location for a brief period of time.

    I appreciate you chiming in. Thank you.
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  • 4205raymond
    I guess a little different situation but son a ME flew into NYC from Charlotte many times one year. He was a resident of NC. Hi-powered meetings for BOA. NY State got a court order and siezed almost $10,000 from his 401. He appealed it and every time he called to check status they threatened him and told him request would go to bottom of stack for punishment. They are ruthless. He finally gave up.
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