pk
Level 15
Level 15

State tax filing

@TBF205860  generally, the earned income is sourced  where the work is done -0- there are of course exceptions.  But in your case 

1. You a resident of OH,working in OH, for a remote employer in WA --- you file a resident return for OH, you did not earn anything ( in this case ) in another state.

2. this remote employer income is treated as  sole proprietor/self-employment income.  It is reported on Schedule-C, you get to deduct all  necessary and allowable  expenses for this money stream.  Note this means that your contractee/ employer is not withholding any taxes  ( including  FICA), thus  you have to make quarterly payments  for federal and state taxes.  Additionally, you also have to pay the Self-Employment Tax ( equivalent to wage earner's FICA) at 15.3% on the net income i.e after expenses.  For employees, the employer and the employee each pay at 50% or 7.65% towards FICA / Social Security-Medicare. So you need to make sure that your  income from this stream allows for the extra 7.65%  hit that you will have because of this.

3. The WA company does not have to register in OH because you are a contractor to them

4. see answer to question 2.

Hope this helps

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