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Comment by nerdponx | Hacker News Reader

Note that even within the USA, complications arise when you live in one state and work in another.

Some (many?) states have mutual arrangements where you can take a tax deduction for income taxes paid to another state, but I don't think they all do. You might end up paying double taxes! And even if the two states do have an arrangement, your employer might not set up tax withholding correctly between the two states, so you have to carefully check your W-2s to make sure you didn't overpay (or underpay, leaving you with a big bill in tax season) throughout the year.

Also, health coverage tends to be very state-specific, so you might get stuck with less-than-ideal coverage for your local health providers if you're on a health plan intended for another state.

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Figuring out who to pay the tax to could get complicated, but you will never legally owe double taxes for the same income to different states. Whatever agreements or laws these states have do not change this.

State A has a law that says if you spend 1 day in State A you owe the income tax for that day.

State B has a law that says if you spend more than 180 days a year in State B, then you owe State B income tax for the full year.

Now you owe tax for that 1 day to both states.

If state B had such a law then it would be illegal. Even California, which is notorious for its tax policies, draws the line at “California-sourced income”, unless it was from a tax-free or lower taxed state, in which case you will only owe the difference.

The Supreme Court has ruled on this as well - https://www.cpajournal.com/2017/10/26/icymi-supreme-court-ru...

I’m not aware of any state where you would pay taxes without being a resident. Afaik it’s only complicated when you’re residence changes often or you technically qualify as a resident of multiple states because of travel.

edit: I should have stated, assuming you are not physically working in that state.

There are several states that tax your income based on the location of your employer even if you do not live or work in that state. New York being the most prominent example since they actually changed their policy during Covid. (Presumably to capture the lost tax revenue from people living in New Jersey who stopped commuting into NYC and started working from home instead.)

> But a handful of states take a different, more aggressive approach. They use special rules to tax remote workers based on the location of their employer’s office — even if the employee doesn’t physically work at that location, according to the Tax Foundation.

> Six states took this approach before Covid-19 upended office work: Arkansas, Connecticut, Delaware, Nebraska, New York and Pennsylvania. But now, that policy is facing fresh scrutiny since many people weren’t telecommuting by choice during the pandemic but were forced to work from home because their offices had closed.

> The State of New York has so far said that it will continue the policy despite the pandemic. If you don’t live in New York, but your “primary office” is there, “your days telecommuting during the pandemic are considered worked in the state” unless your employer has a formal office at your remote work location, the state revenue department says on its website.

https://www.nytimes.com/2021/03/12/your-money/taxes/2020-tax...

Did you read the rest? There’s nothing that says this is the case for people who never worked in NY, but work for a company located there.

> It means that if you usually worked in New York but are working remotely from your home in New Jersey during the pandemic, you’ll still owe New York state income taxes, said Alan Sobel, president of the New Jersey Society of Certified Public Accountants.

Almost every state considers any income for work done while you are physically within the state as income sourced from the state. This means you pay taxes whether you are a resident or not. Most states have some sort of threshold, either number of days or earned income. For tech workers you are likely to hit earned income thresholds pretty much instantly as it is usually prorated according to the number of days you are in the state. That said, a huge number of people just commit tax fraud by never paying or filing. Mostly only CA and NY spend any significant resources identifying and pursuing these people.

Concur/SAP now has an E&Y service that tracks how many days you worked in a state through your expense reports. (So obviously doesn't catch personal travel where you were working.) I was actually expecting to get hit for a couple short trips last year. I wasn't so there must have been some sort of threshold even though NC supposedly kicked in with even a single day.

But, yes, in general people pay even less attention to this than they do to paying use taxes and my accountant has never asked me anything about this kind of thing in the big questionnaire he sends me every year.

Was it looking out for you or for your employer? There are two things to consider - whether or not your employer needs to withhold versus whether or not you need to file. Lots of states are much more lenient to employers but still very strict to the employee. It is pretty common for a worker to need to file while the employer does not need to withhold or face nexus.

IANAL but here are California's rules for example.

https://moskowitzllp.com/what-is-california-source-income

Wages and salaries. Wages and salaries for services performed in California, regardless of the location of the employer or the employee (or where the payment was issued), are taxable to nonresidents.

Of course, people widely don't follow these rules and many states have minimum cut-offs of various sorts but a lot of states are starting to crack down.

The FTB publication linked in that article states:

“Wages and Salaries

Wages and salaries have a source where the services are performed. Neither the location of the employer, where the payment is issued, nor your location when you receive payment affect the source of this income. Part-year residents include on Schedule CA (540NR), column E or Short Form 540NR, line 32 all wages and salaries earned while a resident, regardless of where the services were performed. Nonresidents include the income for services performed in California.”

Without more clarification that would seem to suggest remote work would not be taxable since the services are not performed in CA.

If I'm working on a computer in a state, and the location of the employer is irrelevant, it would be hard for me to argue that I'm not performing services in that state--even if my full-time residence is elsewhere. Where else would I be performing them? But IANAL.

You would be performing them where you (your body) is located at that moment.

Where you are. You are not working on a computer in state, you are working on a computer on your desk that is talking to a computer in that state. Not much different from phones really, do support people technically work in multiple states because they use devices (phones) in those states remotely?

I think we're agreeing. What matters is where your body is--not where a computer you're connecting to is located or where your employer's HQ or other office is. Or where the person you're providing support to lives.

NY defines a resident as someone that has spent at least 30 days in the state (particularly someone that has been living in the state before).

So residence in the literal word sense is moot. If you travel there enough, regardless of where your official house is located....for tax purposes , NY bureaucrats will consider you a resident of NYS.

Live in NH and work in MA and you’ll pay MA income taxes.

Yeah, I know a number of people in NH who were working more and more remotely for a company with a MA location even prior to the pandemic, who switched their status to be officially fully remote. Live in MA/work in NH (no income tax) or live in NH/work in MA? Doesn't matter; you pay full income tax to MA.

Most states have a "nonresident" filing option for income taxes. Whether you actually pay tax in that state depends on the specifics.

True, but that’s almost always for work actually performed in their state.

Yes, but if you are working remotely from a state (or attending an event, meeting customers, etc.), you are performing work in that state. You're not if you're just on vacation.

Historically, most people and most states didn't really pay attention to routine business travel but that's starting to change.

California has a very broad definition of what being a "resident" is, so you can be a full-time resident of multiple states despite only having a single domicile and mailing address.

States generally either tax the global income of their residents (e.g. California), or they tax income earned within the state (e.g. Connecticut). If you are a resident of the former but earn your income in the latter, then you would be on the hook for double tax unless there is a specific exception.

> California has a very broad definition of what being a "resident" is, so you can be a full-time resident of multiple states despite only having a single domicile and mailing address.

No, it doesn't.

> so you can be a full-time resident of multiple states despite only having a single domicile and mailing address.

You cannot (well, not for California, though perhaps for some combination of other states), though you could be a tax resident of multiple states in the same tax year by having a series of domiciles during the year that each were not intended to be transitory when established.

(If you move directly from California to a foreign country, but retain citizenship and return to California for more than 45 days in a future tax year, you can also be a California tax resident with a domicile in a foreign country, but because it is keyed on being a California resident immediately before departing (and not just for any part of the tax year), that wouldn't be a backdoor way for multi-US-state tax residency unless the other state had a broader rule.

> States generally either tax the global income of their residents (e.g. California), or they tax income earned within the state (e.g. Connecticut).

California taxes global income of residents and income earned in the state by nonresidents; this is, AFAIK, the majority rule for states that have income taxes.

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