Work for a NYC company, live and work from home in PA

[ohen]

I recently moved out of NYC and now live and work from home in PA long-term, but still have the same job with the company based in NYC. Do I still need to pay NYC taxes and PA taxes or will I only need to pay PA taxes go forward?

[Critter-3]

Ny is one of the states who taxes remote workers ... you will file both states but get a credit for the taxes paid to the other state.   Since this year will be tricky may I highly recommend you seek local professional assistance for the 2020 return and get educated on how NY & PA work together. 

[TomD8]

ALL your income is of course taxable by your home state of PA. regardless of where you earn it.

With regard to its possibly being also taxed by NY, NY adheres to the "convenience of the employer" doctrine regarding non-resident remote workers.  Basically this means:

If, as a remote worker for an NY employer, you work remotely outside NY for your own convenience, then the income from that work is taxable by NY.

But if you work remotely  because you're required to do so by your employer, then the income from that work is not taxable by NY.

Legislation is pending in NY to define work done remotely outside NY because of COVID-19 as being not taxable by NY, but the legislation has not yet passed. 

https://www.nysenate.gov/legislation/bills/2019/s8386

[ohen]

Who determines if it is by convenience or required by work? I've worked it out with my employer that I am not required to work in the office, therefore work remotely.

[Hal_Al]

Q. Who determines if it is by convenience or required by work? 

A. Your employer and eventually, if necessary, the NY  tax authorities.  If your employer is withholding NY state tax, he's already made that decision, under guidance from the  New York Department of Taxation and Finance.

Your's is a common situation ("worked it out with my employer that I am not required to work in the office").  You moved to PA, for your convenience. So, you are subject to NY tax.  A common example of "convenience  of the employer" is that you have customers in PA that you need to meet with or your company has an facility there that you work in  (an office with you as the only employee would not qualify unless you meet clients there).

Nobody has answered your question about NY CITY tax.  I don't know the answer, for sure, but don't think you are subject to that, just NY state tax.

[TomD8]

Here's a link to the document explaining how NY interprets "convenience of the employer":

https://www.tax.ny.gov/pdf/memos/income/m06_5i.pdf

The document is from 2006, but I can't find any more recent updates (if any exist).

I tend to agree with @Hal_Al that your income is taxable by NY.  Sounds like working from home was your preference and your employer did not object.  Just my opinion.

[sakonidas]

My wife and I have lived in PA for several years.  She recently accepted a NYC job with the agreement of working remotely on a permanent basis.  The company has no affiliate offices in PA, therefore she has a proper home office to conduct the company's business.  She only comes to NYC 12 times a year to conduct interviews.  Therefore, is she only subject to NY tax for those 12 days.  thanks 

[FangxiaL]

If the company is NY based, most likely she has NY source income. Is there any NYS income tax withheld from her paychecks? If that is the case, you would need to file a NYS non-resident return and claim the credit for taxes paid to NY on your PA resident return.

@sakonidas

[Hal_Al]

 @sakonidas  said " Therefore, is she only subject to NY tax for those 12 days."

No, that's not how it works with NY.  Even 1 day in NY, makes her subject to NY tax on her full year salary. 

Here's a link to New York's memorandum on its "convenience of the employer" tax doctrine regarding non-resident telecommuters: https://www.tax.ny.gov/pdf/memos/income/m06_5i.pdf

[sakonidas]

Thank you for the quick response FangxiaL.  to answer your question

Is there any NYS income tax withheld from her paychecks? yes, NY State is being deducted.

As you mention, i file a NYS non-resident return and PA schedule G/L return to claim the credit for taxes paid to NY.  With that being said, there is a section for calculating NY income allocation.  rather than allocating 100% of her income to NY, i enter 94% of her gross to working out of state with only 12 in NY.  this shoots up the amount of the refund.  I want to make sure that this is correct.  Her employer requires her to work from home.  again, thanks for any clarification in advance.

[FangxiaL]

It should be 100% NYS source of income, from that job at least.