I will be starting a job with a company based in NYC in mid August this year. I have the following questions:
1. If due to the COVID situation, I end up working Aug-Dec 31 remotely (from Texas where there is no state income tax), do I still have to file NYC and NY state taxes? Will I owe taxes to either one?
2. If I live and work in NYC for 3.5 months this year, can I still be considered a TX resident for 2020?
Will I owe NYC and NY taxes in that case?
Thanks in advance
1. New York is one of the few states that taxes non-resident remote workers, in certain circumstances. NY uses the "convenience of the employer" doctrine, which says that if you work remotely for your own convenience (rather than that of your employer), your income from that work is subject to NY income tax.*
2. Any income you have from work actually (physically) performed in New York is taxable by NY, regardless of whether or not you are a NY resident.
Tom - thanks so much for the detailed reply and also the link you provided. Has there any recent guidance
from NY as to the "convenience" question as it applies to COVID? For example, I do not have the choice
of going in to the office (my employer is requiring all employees to work from home since the Manhattan office is closed)?
According to the first blog post in this reference, dated May 29, there is a bill before the NY senate that would make non-resident remote worker income tax-exempt because of COVID-19: https://caroprese.co/blog
And according to this reference, that bill was "referred to committee": https://nyassembly.gov/leg/?default_fld=&leg_video=&bn=S08386&term=2019&Summary=Y&Actions=Y
So it looks like the answer to your question is still up in the air at this point.
Strange that the summary of the bill"
"Authorizes businesses to designate work performed remotely due to the outbreak of COVID-19 to have been performed at its normal work location for state and local tax purposes for the duration of the state disaster emergency declared pursuant to executive order 202."
contradicts what the blog says. I read the above as saying that remote work will be considered on-site work for tax purposes.
Does it not?
That’s what the bill says but at the bottom of the reference under “action” it says referred to committee. So I read it that it hasn’t yet been passed into law. Just my reading.
For what it's worth, found this reference that's consistent with the blog: