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lighthouse315
New Member

Working remotely in a different state than employer- where to pay state income tax?

I work a W-2 position at my home in NY entirely remotely for a company entirely based in NC. Which state should I be paying income tax to and how should I have this set up? I moved to NY from NC recently and employer is still withholding only for NC, trying to determine what changes need to be made.  Thank you.

2 Replies
retiree
Level 7

Working remotely in a different state than employer- where to pay state income tax?

You need to have your employer update your place of residence for all tax reporting.  If you work in a state that you do not reside in you need to make sure that is clear. 

 

Generally you can expect to pay taxes to the state where you reside.  You will also be required to pay taxes to the state where you work --none of this is affected by the state your where your employer is located.  As a remote employee that spends most of your time out-of-state you would not be expected to pay taxes there.

 

Under certain conditions you may be required to pay taxes to the state your employer is located in, if you spend a significant amount of time there.  (for example some cities levy taxes on visiting sports team players when the team 'visits' and plays a specified number of games/hours there).

TomD8
Level 15

Working remotely in a different state than employer- where to pay state income tax?

If you moved this year, for 2019 you will file as a part-year resident in both NY and NC.  NC can tax all your income until the date you become a resident of NY.  NY can tax all your income after that point.  You became an NY resident for tax purposes on the day you began living in your new home in NY.

 

Once you become an NY resident, from that point on NC can only tax income you earn from actually (physically) working in NC.

 

So if you are now an NY resident and you no longer actually work within NC, your earnings (from the date of NY residency) are taxable only by your new home state of NY.   So, if that's your situation now, your employer should withhold only NY taxes. 

 

If your employer is unable or unwilling to withhold NY taxes, you will have to begin making quarterly estimated tax payments to NY.

**Answers are correct to the best of my ability but do not constitute tax or legal advice.
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