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Guidance Needed on State Tax Obligations for Remote Work - Work for NC Org and Live in Louisiana

Hi TurboTax Community Support,

I am a full-time resident of Louisiana and am employed remotely by a company based in North Carolina. Since starting this job in 2022, I have been having Louisiana state taxes deducted from my paychecks, based on my understanding that taxes should be paid to the state of residence, not the employer's location. However, I am now unsure if this was correct.

I am concerned that I may have needed to file tax returns and pay taxes in North Carolina for the year 2022, and that I should consider doing the same for 2023. I'm uncertain about the correct procedure.

 

Additionally, I came across information on a "digital nomad tax exemption" in Louisiana (Title 61 REVENUE AND TAXATION Part I. Taxes Collected and Administered by the Secretary of Revenue Chapter 13. Income: Individual §1357. Income Exemption for Digital Nomads), which might impact my tax obligations.

 

Could you please provide guidance on whether I need to file and pay taxes in North Carolina, how to handle my Louisiana taxes considering the digital nomad exemption, and how to avoid potential double taxation? I want to ensure compliance and correct tax payment to the appropriate state(s).

 

Thank you for your assistance.

 

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2 Replies

Guidance Needed on State Tax Obligations for Remote Work - Work for NC Org and Live in Louisiana

@awburrell 

NC only taxes the income you earned while you-yourself were physically in NC

 

As such, as long as no NC taxes were deducted, you would NOT file an NC Nonresident tax return. And if you started one in the state section, you can delete it. You said LA tax withholding was done...good, since taht income is LA taxable.

 

On the My Info page, at the bottom, you would not indicate income from another state (NC).

________________________

There are a few states who (under certain conditions) do tax remote workers who work thru a site located in that state, from some other state.  NC is not one of them.

 

The Digital Nomad rule was for people who temporarily located in LA for a while (especially during COVID restrictions).   Thus, if an NC resident, who was working at an NC employer, temporarily went to LA to live with relatives for a couple months, and worked remotely back to NC...LA won't tax that as LA income.    But that's for people whose primary/permanent residence is normally outside of LA.

____________*Answers are correct to the best of my knowledge when posted, but should not be considered to be legal or official tax advice.*

Guidance Needed on State Tax Obligations for Remote Work - Work for NC Org and Live in Louisiana

Thank you very much!

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