Live in Florida but work remotely by computer for Connecticut company

[gop1250]

I have called the Connecticut DRS and spoken with a tax attorney but cannot find a suitable answer to my question.  Hoping someone on here might have some insight.

I moved to Florida at end of 2022.  I work for a law firm that is located in Connecticut and works exclusively within Connecticut.  I connect to the company remotely with a work computer for at least 8 hours per day.  The company does withhold Connecticut taxes.  It seems that some workers at DRS think I should not owe CT taxes because I am a nonresident, while another worker that I spoke with said that because I am "connected" via computer and attend work meetings, conferences, state court appearances, etc, through my work computer, I "could be" considered to be working in Connecticut.  It seems to be a wait and see what happens if they audit me situation, which I am very uncomfortable with.  Does anyone have insight on this? 

[Anonymous_]

I'll page @Critter-3 and @jtax 

[TomD8]

Non-residents of CT are taxed by CT on Connecticut-sourced income.  Scroll down to "Connecticut-sourced income of a Non-resident" in this CT tax publication for the details:

https://portal.ct.gov/DRS/Individuals/Nonresident-Part-year/Tax-Information#whomustfile

Note in particular that compensation for services is CT-sourced only if the services are carried on in Connecticut.   Remote work carried on from a Florida location is carried on in Florida, not "in" Connecticut.

The general rule for sourcing of work income is that it is sourced where the work is actually (physically) performed.  Otherwise (for example) every employee of Coca-Cola (headquartered in Atlanta) would be paying Georgia state income tax.  Also, if Florida had an income tax, you'd be paying income tax to Florida - even though your employer is located in CT.

[Hal_Al]

I agree with @TomD8 , since you do not physically work in CT, you usually would not be subject to CT tax.  

You say " The company does withhold Connecticut taxes".  This means, you will have to file a CT non-resident return to get a refund.  That's when it may all come to a head with CDRS.  Your employer must have some reason for withholding CT tax.

In particular, "attend....state court appearances, etc, through my work computer" sounds pretty iffy.   You may become the test case for this situation. 

[TomD8]

@gop1250 --

Your employer should not be withholding CT taxes.  See Example 6 on page 8 of the Connecticut Employers Tax Guide:

https://portal.ct.gov/-/media/DRS/Publications/pubsip/2021/IP-2021-1.pdf

Unfortunately, as @Hal_Al said, in order for you to obtain a refund of the mistakenly withheld taxes, you'll have to file a non-resident CT tax return.  On that return you should allocate zero income to CT, but show the CT withholding.  That should result in a full refund.

I doubt that you will become a "test case", because CT tax law is very clear that non-residents of CT who never work inside CT are not liable for CT income tax on their work earnings.

[gop1250]

I hope you’re correct. I think the primary concern is the fairly regular attendance at remote court hearings. This did not become possible until Covid. Now, there appear to be several attorneys who work remotely and attend remote hearing. If in person, in-court hearings are held, in-state members of the law firms attend them.  

[gop1250]

@Hal_Al  - That does appear to be the issue. The Connecticut courts did not really allow remote hearings until COVID. Now, they are fairly regular (if requested) and held via the teams platform.  If the court requires an in-person hearing, another member of the firm attends. 

[TomD8 · Accepted solution]

With regard to CT state income tax, only two questions are relevant: 1. Were you a resident of CT at any time during the tax year? 2. Did you actually (physically) perform any work in the State of CT during the tax year? If the answer to both questions is No, then your income from that work is not subject to CT state income tax.