topic Working Remotely for several states in State tax filing

Working Remotely for several states

mimirose0421 — Tue, 02 Mar 2021 15:52:00 GMT

I am an IT professional and worked on several short-term efforts, for companies in different states. The work was both W2 and 1099. I live and work remotely in NY and did work for companies located in NE and OH. Do I have to file state taxes in NY, NE, and OH or just NY?

Re: Working Remotely for several states

MinhT1 — Tue, 02 Mar 2021 16:04:48 GMT

If you work remotely from New York, all your income is New York sourced and you only have to file a state return for New York.

Re: Working Remotely for several states

mimirose0421 — Tue, 02 Mar 2021 16:09:28 GMT

Thank you! Can you please clarify what 'New York sourced' means?

Re: Working Remotely for several states

JotikaT2 — Tue, 02 Mar 2021 16:29:21 GMT

New York source means any income "derived from or connected with a business, trade, profession, or occupation carried on in New York State."

Please see the attached link for more details from New York state.

New York definition of sourced income for certain business types

If you are a New York resident, you will be required to file a state tax return as a resident if you meet the requirements as outlined in the link below.

New York resident definition

Re: Working Remotely for several states

mimirose0421 — Tue, 02 Mar 2021 16:42:27 GMT

Thanks! So even though the other companies I worked for don't reside in NY, because I did the work in NY, it is considered 'New York sourced'. Is my understanding correct?

Re: Working Remotely for several states

JotikaT2 — Tue, 02 Mar 2021 17:07:56 GMT

That actually depends upon the source of your income and whether it was earned as an employee or a contractor.

If you earned the income for the other states as an employee of the company on a W-2 form, your income would be sourced to New York.

Your work as a contractor will be dependent upon how your income is earned and the filing requirements for each state.

Ohio requires nonresidents to file a tax return for any income from Ohio-sourced income from doing business in Ohio.

Ohio filing requirements for Nonresidents

Nebraska taxes all nonresidents on any income earned from Nebraska sources.

NE tax booklet with full instructions

Therefore, if all of your income from Ohio and Nebraska is related to your work as a contractor and reported on a 1099 form, you will need to file nonresident returns as well for both of these states. Please note, you will be able to claim a credit on your New York resident return for any income taxed in these states to ensure you are not taxed twice on the same income.

Re: Working Remotely for several states

mimirose0421 — Tue, 02 Mar 2021 18:14:10 GMT

Thanks for the great explanation! You specifically mention 1099 needing to file. What if the money was reported on a W2? Do I still need to file with the state?

Re: Working Remotely for several states

ToddL99 — Tue, 02 Mar 2021 18:21:41 GMT

As a resident of NY and working from NY, you must file the W-2 income with your NY return.

If the W-2 shows that state tax was withheld for another state (not NY), then you would have to file a return with that state to get a refund.