Remote Work from Maine for New York Company - Domicile, Bona Fide Employer Office?

[specialmonkey]

I've been working remotely in Maine for all but 40 days of pandemic '21. My employer is an NYC company. They've allowed me to move to my new Maine address and continue working remotely.

I'm not sure how they will withhold taxes after my request is processed.

I own an apartment in Brooklyn but believe I'm now domiciled in Maine. I know this is a sticking point in NY. I've not moved all of my belongings from the apartment, changed doctors, filed a change of address with the USPS, changed voter registration, or driver's license - yet - (should I ASAP?) - but I haven't spent much time in NYS either.

I've been living in Maine with my girlfriend in a house she owns. I help her as much as I can with a check each month - and we split groceries and similar expenses - but it's not half & half - as I'm still paying a mortgage and coop maintenance on the Brooklyn apartment. I'm considering selling the apartment. She'd like me to so I can help her out more with the expenses in Maine. I'm pretty certain I don't want to rent out my apartment.

I read here you can change your domicile as much as you like as long as it can pass the test.

I've also been reading about bona fide employer offices. Does my company agreeing to the remote work arrangement (and change of address) mean my home office is a bona fide employer office, and does this preclude NYS+NYC taxes on my income from the NYC company? I don't use any special equipment in my job other than internet and computer. Doing further reading, it's looking like my home office will not qualify as a bona fide employer office.

I know the domicile question lingers. Is it worth trying to change domicile? Or, if I just paid the NYS+NYC taxes, would Maine rebate, or only be concerned with any additional (to the NYS) income I might have?

I'd like to avoid double taxation and ideally pay only Maine's lower taxes on my income from the NYC company. But I also don't want too much hassle.

I'm not sure how much of a monetary difference there could be comparing any of the possibilities, except for double taxation, which would certainly sting. I think Maine's taxes are lower than NYS+NYC, but maybe not so much so.

I don't have any other ties to NY other than my employer and apartment.

My own assessment is that I will be subject to NYS and likely NYC taxes due to employment considered to be in NYS, not to mention the domicile question. I have a feeling my employer will continue to withhold at least NYS if not both NYS+NYC taxes. If this is the case, again, can I continue to pay taxes as if I were living in Brooklyn, and not be subject to Maine tax on this income?

It looks like I might need to file taxes in ME too but perhaps use this (Credit for Income Tax Paid to Other Jurisdiction Worksheet for Tax Year 2020 36 M.R.S. § 5217-A) form - https://www.maine.gov/revenue/sites/maine.gov.revenue/files/inline-files/20_cred_tax_pd_othr_juris_f... In this case I'm not sure how much sense it makes to go through with all the changes I'd need to prove domicile in ME (like license, voter registration, etc.) - and guess that would depend on my ultimate intent of where to domicile (though I'm not 100% sure of this myself). By the number of days spent in Maine, I believe I'm considered a Maine resident.

Thanks for your help.

[TomD8]

"Your New York domicile does not change until you can demonstrate with clear and convincing evidence that you have abandoned your New York domicile and established a new domicile outside New York State."

Frequently Asked Questions about Filing Requirements, Residency, and Telecommuting for New York Stat...

From your question I believe that NY will conclude that you have not yet abandoned your NY domicile nor established a new domicile in ME.  If this is the case, they will consider you a NY resident for tax purposes, and your income will remain 100% taxable by NY, regardless of where you earn it.   NY is known for its strict interpretation of its residency rules.

Additionally, the portion of your income that you earn by physically working in ME is taxable to you by ME as a non-resident.

Therefore IMO you must file a non-resident ME tax return reporting your income earned in ME, and a resident NY tax return reporting ALL your income.

You may take a credit on your NY return for the tax you pay to ME, so you won't be double-taxed.

In TurboTax, be sure to complete the non-resident state return before the home state return, so that the program can calculate and apply the credit correctly.

The bona-fide office issue will become relevant once you abandon your NY domicile and establish your domicile in ME, assuming you continue to telecommute from from ME for your NY employer. 

Finally, this NY tax document explains how NY taxes non-resident telecommuters and how it determines a "bona-fide office":  

TSB-M-06(5)I:(5/06):New York Tax Treatment of Nonresidents and Part-Year Residents Application of th...

NOTE: if you do change your domicile in 2021, you will file your 2021 returns as a part-year resident of each of the two states.