Although states and localities initially issued guidance generally providing for a “status quo” method of taxation for nonresident employees working traditionally in their states, many are struggling with the longer-term effects of telecommuting employees who no longer physically work within their jurisdictions. Given the prolonged length of the pandemic and the adjustment to remote work for both employers and employees, remote work may very well become a regular part of business operating and hiring models for the foreseeable future, with many employers allowing or requiring their employees to work remotely on a part-time or even permanent basis.
COVID-19Īlthough the concept of remote work is not new to the state and local tax field, the COVID-19 pandemic has amplified the tax and business consequences of telecommuting employees over the past year. This article explores the latest state tax developments and issues to be considered as taxpayers continue to navigate the remote work environment. Several controversial policies have invited lawsuits, however, as states continue to grapple with the long-term effects of a remote workforce.
As the consequences of long-term remote work have continued to grow in prominence across the country, many states and localities have issued guidance regarding the income tax treatment of teleworking employees and business tax nexus policies.
The fallout from the coronavirus (COVID-19) pandemic continues to have a significant impact on the way employers conduct business, with many employees working on a remote basis much longer than initially anticipated.
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