topic Re: Remote work in Business & farm

Remote work

Sunshine222 — Fri, 07 Aug 2020 05:09:59 GMT

I live in North Carolina and have a S Corp there. I work remotely and see clients in California. Do I have to pay taxes to California?

Re: Remote work

Carl — Fri, 07 Aug 2020 11:44:39 GMT

Generally if you work in California, whether you’re a resident or not, you have to pay income taxes on the wages you earn for those services. That’s due to the “source rule”: California taxes all income with a source in California regardless of the taxpayer’s residency. And for purposes of taxing employees, the source of income from services is the location where the services are performed. This is true even if you are a nonresident, even if the contract with the employer is made out-of-state, and even if the wages are paid outside of California.

Re: Remote work

Rick19744 — Fri, 07 Aug 2020 23:47:37 GMT

There are a number of factors that impact whether a taxpayer (or business) needs to file in a particular state regardless of whether they are domiciled or "incorporated" in a particular state. This has to do with what is known as nexus (contact) creating activities.

Additionally, states have different types of tax which in general are a state income tax or a franchise tax which is essentially a privilege tax to do business in that state.

I have attached a link to get you started in this area, but it may be in your best interest to discuss this with a tax professional.

https://www.ftb.ca.gov/file/business/types/corporations/s-corporations.html