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Home » Be Aware Of These Remote Worker State Tax Liabilities – Cody Biggs

Be Aware Of These Remote Worker State Tax Liabilities – Cody Biggs

State Tax Liabilities

Remote work has become the new normal for many people worldwide since the COVID-19 pandemic. At the onset of the pandemic, companies and organizations scrambled to set up a remote work environment for their employees to continue their work. As a result, a significant proportion of the workforce began working from home or outside of their employers’ state. According to Cody Biggs, the shift towards remote work has led to various tax implications, and it has become crucial to understand and be aware of the remote worker state tax liabilities before the tax season.

Cody Biggs Lists Remote Worker State Tax Liabilities To Be Aware Of Before The Tax-Season

Taxation of remote workers depends on several factors, such as the state laws where the remote worker resides, the employer’s location, where the work is performed, and the duration of the remote work. The difference between the state laws adds more complexity to the taxation of remote workers, says Cody Biggs. The state laws that govern remote work and taxation vary widely, which makes it more challenging to meet the tax requirements.

One of the states that have implemented strict regulations on remote work is New York. According to the New York Tax Law, remote workers are subject to New York tax laws even if they work from a different state. In simpler terms, if an employee is living in New Jersey and working remotely for a New York-based company, they will still be subject to New York tax regulations. New York tax laws consider the location of the employer’s office as the employee’s workplace instead of the physical location of the employee. Employers located in New York are, therefore, required to withhold state taxes for their remote workers regardless of their location.

Another state that has implemented strict regulations on remote work is Massachusetts. If a remote worker earns more than $8,000 per year from a Massachusetts-based company, they are required to file a non-resident tax return even if they don’t live in Massachusetts. This means that remote workers who work for Massachusetts-based companies have to pay taxes on their total income, regardless of their location.

Some states have implemented reciprocity agreements between states to avoid double taxation for remote workers. Reciprocity agreements are agreements between two or more states that enable a worker who lives in one state and works in another to pay income taxes to only one state instead of both states. Currently, the states that have reciprocity agreements include Pennsylvania, New Jersey, Maryland, and Delaware.

It is essential for remote workers to keep track of the states and the tax regulations that apply to them concerning remote work. Failures to comply with the tax regulations may result in penalties and fines. It is advisable to consult a tax expert to avoid making mistakes that may be costly in the future.

In addition to the state tax liabilities, remote workers are also eligible for tax deductions for home office expenses. According to Cody Biggs, home office expenses such as rent, mortgage payments, utility bills, cleaning, and maintenance expenses are eligible for tax deductions. However, the expenses must be entirely related to the remote worker’s job activities, and the expenses must be explicitly allocated to the home office.

Cody Biggs’s Concluding Thoughts

In conclusion, remote workers have become the new normal, and it is essential to be aware of the state tax liabilities before the tax season. The regulations on remote work and taxation vary widely between states, and it is crucial, as per Cody Biggs, to keep track of the state laws and the tax regulations that apply to remote workers. To avoid penalties and fines, remote workers should consult a tax expert to minimize any tax liabilities. Remote workers are also eligible for home office tax deductions, which help reduce their tax burdens. Stay informed, stay updated, and plan ahead to minimize the tax liabilities for remote work.

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