@d1a1w wrote:
@SteamTrain, Many thanks - I am currently not required to remain part of the NY office, however, I am exploring both avenues. If I am based out of the NC office, you said, "..But for subsequent years there should only be NC taxes to file (with a lower tax rate)..".
Should I expect to pay 'more' taxes if I remained based out of the NYC office and opted to file both state tax returns (NY and NC)?
If you work at home for the convenience (or necessity) of your NY-based employer, then you do not pay NY state tax on your income. If you live and work outside of NY for your own convenience, you are required to pay NY state tax on that income.
That's a little more challenging to apply when the company has offices (a physical presence) in more than one state. I don't know that it would be essential for you to "transfer" to the NC office, when the business has a physical presence in both states. But I suspect that if the place you go when you have to have an in person meeting (whether once a week or once a year) is in NY, you will probably be subject to NY tax. Here is some guidance from NY.
https://www.tax.ny.gov/pdf/memos/income/m06_5i.pdf
What is the downside of transferring to the NC office? Even if the tax rates are equal, you would be having to file 2 state tax returns. And NC's income tax rate is slightly lower than NY, so you will probably pay more if you are subject to the NY telecommuter tax. (NC is 5.25%, NY is about 6.2-6.5% for the typical middle class taxpayer.)
You definitely want to get the heck out of NYC, because that's another 4% you don't want to pay. As best I can tell, you only owe NYC income tax if you have a physical presence there (live OR work physically in NYC), and NYC does not tax telecommuters, just the state.
