It depends. The issue you raise is fact specific and therefore, you will need to compare your facts with existing NY law and policy on the issue of telecommuting.
It the situation you describe, NY will apply its Convenience of Employer Test in order to determine whether the employee must pay NY income tax. The primary consideration when applying the Convenience of Employer Test is whether the employee's home office is a bona fide employer office. There are several factors to consider whether the employee's home office is a bona fide employer office. If the employee's home office meets the definition of a bona fide employer office, then any work performed from that office, and assuming such office is outside of NY, will be treated as work performed outside of NY and thus not subject to NY income tax.
The attached memorandum has been prepared by the NY State Department of Taxation and Finance and while it is dated from May 2006, NY tax instructions for non-residents and part-year residents continue to refer taxpayers to this memorandum regarding the issues you have raised. Thus, it continues to be NY's current tax policy. The discussion about what constitutes a bona fide employer office begins on page 2 and continues through the end of the document at page 6. You will find this memorandum very helpful.
New York State Department of Taxation and Finance Office of Tax Policy Analysis Technical Services D...
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