I am a permanent resident of Michigan and work 100% remotely. I had two different employers last year, one based out of New York, NY and one based out of Pennsylvania. I am confused about filing state returns. Do I just file for MI since I am 100% remote? Or do I have to file a NY and PA state return as well? Also, do I need to fill out the 'W-2 Additional Information Statement' as well? If so, how?
It depends on your working arrangements and your W-2.
Do you have either New York or Pennsylvania listed in Boxes 15-20? If you do, file for whatever state is on the W-2.
Both New York and Pennsylvania follow the “convenience of the employer” rule, meaning if you are working remotely for your own convenience — and not because of a business purpose — then you are subject to tax by those states.
The rule generally applies only if you work in-state and out-of-state. For example, your employer gives you the option to work from home three days a week.
As a 100% remote employee in Michigan, “convenience of the employer” should not apply to you. And you should not have to file or pay any NY or PA tax. However, New York has taken the rule to extreme lengths at times.
If you have NY or PA listed on your return and have state tax withheld, file a nonresident return to claim a refund. Change your state wages to $0.
If you have NY and PA income, but no withholding, you can do the same thing to show you owe no NY or PA tax. You won't get a refund or owe tax.
It’s possible NY will have an issue with a $0 income filing.
Read the discussion by former NY state auditor @kristinelbly in I work for a NY company, remotely from NC. I spent 1 day in 2017 on site, but my W-2 has full salary in the state earnings boxes for both NC and NY
It depends on your working arrangements and your W-2.
Do you have either New York or Pennsylvania listed in Boxes 15-20? If you do, file for whatever state is on the W-2.
Both New York and Pennsylvania follow the “convenience of the employer” rule, meaning if you are working remotely for your own convenience — and not because of a business purpose — then you are subject to tax by those states.
The rule generally applies only if you work in-state and out-of-state. For example, your employer gives you the option to work from home three days a week.
As a 100% remote employee in Michigan, “convenience of the employer” should not apply to you. And you should not have to file or pay any NY or PA tax. However, New York has taken the rule to extreme lengths at times.
If you have NY or PA listed on your return and have state tax withheld, file a nonresident return to claim a refund. Change your state wages to $0.
If you have NY and PA income, but no withholding, you can do the same thing to show you owe no NY or PA tax. You won't get a refund or owe tax.
It’s possible NY will have an issue with a $0 income filing.
Read the discussion by former NY state auditor @kristinelbly in I work for a NY company, remotely from NC. I spent 1 day in 2017 on site, but my W-2 has full salary in the state earnings boxes for both NC and NY
Thank you so much for providing some insight! Both W-2’s had Michigan listed in box 15. So in this case, only Michigan income taxes were taken out, correct? Would this mean that I don’t select “I made money in another state?” at the beginning of my return? This prompts me to fill out individual state returns. Can I just remove those? Also, when I was working on PA taxes it promoted me to to fill out the 'W-2 Additional Information Statement'. I have no idea how to fill this out or if it’s necessary, but it doesn’t appear to be optional.
Yes, you are correct, you do not have to select Made money in other states in the My Info section.
If only Michigan appears in boxes 15 to 17, then only Michigan received withholdings from your employer. Your work was all done in the state of Michigan, so that is where it is taxed. If your employer did not withhold for the other states, there is no reason to file a return there to collect a refund.
Yes, you may remove the other tax returns.