Tax Laws Discourage Telecommuting

June 20, 2006

It is interesting that tax laws in some states effectively double-tax telecommuters:

Under a longstanding New York tax rule, nonresidents who telecommute some or most of the time for their New York employers may be forced to pay New York taxes, not only on the income they earn when they work in New York, but also on the income they earn when they work at home, in a different state. Because telecommuters’ home states may also tax the income earned at home, these employees may be double taxed on that income. 

 This is an expecially bad practice considering that fuel conservation, emergency preparedness, and achieving work/life balance are all in the public interest.  In effect , NY is taxing conservation of fuel, disaster preparedness, and work/family life balance.  For some reason I am actually surprised by this.  I know I should never be surprised at the stupidity of politicians, but in this case I am.

Entry Filed under: Social Benefits. .

5 Comments Add your own

  • 1. Larry Wagman  |  July 6, 2006 at 3:54 pm

    Just to add more bad news. Not that this should surprise anyone, but NJ has also stated that the “convenience/ necessity tests” provided in the NY ruling applies to NJ. See the below correspondence of 2/19/2004.

    [Dear CCH:]

    The Division of Taxation acknowledges receipt of your letter dated February 19, 2004 requesting information on New Jersey’s method of allocating wages for telecommuters.

    Currently New Jersey like New York still uses the convenience/necessity test for the allocation of wages.

    If you require additional information please feel free to contact my office.

    Very truly yours,

    Michael J. Roach, Chief

    Individual Tax Audit Branch

  • 2. Wed27  |  November 17, 2006 at 4:02 am

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