WFH out of state with company based in NYC

Hello,

 

I am working for an employer that is based in NYC. I plan to hop around and WFH in different states and countries for a few months before my employer mandates work in the office. How should I go about filing my taxes in Colorado, California, Utah, Florida, and internationally? Do I need to notify my employer?

 

Thank you,

Alex

dclick
Expert Alumni

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Hello and thanks for reaching out with this excellent question!

Typically, an attempt to establish residency is required to establish a taxable nexus in a new state. Each state has slightly varying definitions of what constitutes residency.

For example, in Virginia, like most states, we have the 183 days rule:

However, typically, you would not be considered a residence if you were merely taking temporary absences / vacations in various states and working from them.

Actions that contribute to establishing residency:

Here are some actions that can help you establish domicile in a new state:

  • Keep a log that shows how many days you spend in the old and new locations. (You should try to spend more time in the new state, if possible.)
  • Change your mailing address.
  • Get a driver’s license in the new state and register your car there.
  • Register to vote in the new state. (You can probably do this in conjunction with getting a driver’s license.)
  • Open and use bank accounts in the new state. Close accounts in the old state.
  • File a resident income tax return in the new state, if it’s required. File a nonresident return or no return (whichever is appropriate) in the old state.
  • Buy or lease a residence in the new state, and sell your residence in the old state or rent it out at market rates to an unrelated party.
  • Change the address on important documents, such as passports, insurance policies, and wills or living trusts.

The more time that elapses after you move to a new state and the more steps you take to establish domicile in that state, the harder it will be for your old state to claim that you’re still a resident for tax purposes.



I would suggest keeping a record of your locations and dates for review at the end of the tax year. If you do not establish permanent residence, get state level identification, or make other major moves towards establishing a permanent residence you will likely not owe income tax in a state due solely to a short term visit.

I hope this helps!

-Dennis

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Thank you for the great answer. Do I need to pay taxes in those states if I am staying there less than a month?

dclick
Expert Alumni

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Typically not, it is generally classed the same as if you were on a vacation to that location.

Glad I could be of help! I see a lot of clients with similar retirement situations as they explore the beautiful country via RV.

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KochuK
Employee Tax Expert

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Hi HANYC, thank you for joining the "Ask the Experts: Moving" special forum today.

 

Unless you can demonstrate that you "permanently change your domicile" by intent to CO, CA, UT, FL(no tax) and overseas, your current domicile is your state of residency, thus have income tax reporting requirement.

 

Each state has its own rules to determine the state residency. It is best to check with your State Department of Revenue (link inside below article.)

What is my state residency status?

https://ttlc.intuit.com/community/state-taxes/help/what-is-my-state-residency-status/00/26000

 

The short period away from home is probably considered temporary absence, which does not create state filing requirement on CO, CA, UT.

 

Furthermore,  NY taxes telecommute income. 

Quote

My primary office is inside New York State, but I am telecommuting from outside of the state due to the COVID-19 pandemic. Do I owe New York taxes on the income I earn while telecommuting?

If you are a nonresident whose primary office is in New York State, your days telecommuting during the pandemic are considered days worked in the state unless your employer has established a bona fide employer office at your telecommuting location.

There are a number of factors that determine whether your employer has established a bona fide employer office at your telecommuting location. In general, unless your employer specifically acted to establish a bona fide employer office at your telecommuting location, you will continue to owe New York State income tax on income earned while telecommuting.

Unquote

https://www.tax.ny.gov/pit/file/nonresident-faqs.htm#telecommuting

Hope this helps.

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