Remote Work

[tedphillips512]

I have worked for the same company continuously for several years.  In April I moved out of state, but continue to work remotely.  The employer has reported 100% of my income in my original state and withheld taxes accordingly.  There is no income reported for my new state or taxes withheld.

[LenaH]

Can you please clarify what two states were you a part-year resident of? 

[tedphillips512]

My employer is in Illinois where I lived until 4/30/21.  I now live in Massachusetts.  

[LenaH]

You will file a part-year return for Illinois and a part-year return for Massachusetts. Your income will be allocated to Illinois from 1/1/21-4/30/21 and to Massachusetts from 5/1/21-12/31/21 as you are responsible to pay the state in which your income is sourced (the state in which you worked to earn the money) since you have and continue to work remotely. 

You will get a refund from Illinois for the overpayment since your employer never changed your state withholding, and you will owe Massachusetts for the period of time you earned money in that state and did not pay income tax. Please ensure your employer switches your state withholding to your current state of residence. 

For more information, please see How do I file a part-year state return?

@tedphillips512

[tedphillips512]

Does the "Convenience Rule" factor into this situation at all?  My working in Massachusetts is not for the convenience of my employer.  They do not have a presence in Massachusetts and I do not believe they have any other employees in Massachusetts.  By following the questions within turbo tax, I have created returns with 100% of my wages being taxed in IL and my receiving a credit for taxes paid to other jurisdictions on a Mass return.

[Vanessa A]

No, the fact that you are physically located and living in MA, your income is fully taxable by MA for the time you were living in the state and does not apply in this situation. The convenience of the employer rule was for people living and working remotely in another state working for a company located in MA when they were previously physically working in MA.