I work remotely as a software engineer and travel both for business and personal reasons. In 2019, I worked in several different states. The guidance I'm reading here suggests I need to pay nonresident income in each state, excepting:
- states with no income tax
- states with reciprocal agreements with my home state
- states for which my income doesn't meet a minimum threshold, if any
So far so good. But I'd still like to clarify a few points:
- Does it matter if I worked in the state because it was a business assignment or purely for personal reasons? In most cases, the state I was physically located had nothing to do with the work itself; i.e., I didn't go into an office or anything, basically just used some electricity and internet access.
- Does it matter if I'm a W-2 employee or 1099-MISC self-employed contractor? (This changed during the year.)
- Most state revenue service websites specify that I pay taxes on income "from Colorado sources" (for example) or some similar phrase. If I'm working remotely while temporarily in Colorado (say, for a few weeks), is that income from Colorado sources? The idea of what state is sourcing my income is a little unclear to me since none of my employers are actually located in my resident state either. (Again, I'm not specifically interested in Colorado, but more generally for any state.)
- Are there any other circumstances under which I don't owe tax to some of these states? Obviously, the fewer state returns I have to file the better.
