Working remotely (employer withholding tax in MA) while being a partial resident of NJ, FL

[swsh90]

Hi,

I asked a similar question yesterday but I'll provide the full details of my situation seeking for some guidance. Until October 2016, I worked as a remote contractor while being a resident of NJ. On the W2 Form, the address of the company is based in Atlanta, GA but they withheld tax from MA. 

Ever since October 2016, I moved to Florida to work here. I am a resident of FL, and while the company on the W2 Form is based in NY, they seem to have not withheld any state tax from me. (I'm assuming this is because Florida has no state income tax?)

Can someone please guide me as to which forms I need to complete? (My idea is that I need to submit a non-resident tax return form of MA, while submitting a partial resident tax return form of NJ. Since FL doesn't have state income tax, there is no need to file a resident tax return. I think the address of where the company is based, in my case GA, and NY, do not matter but I'm not sure.) 

Any help would be appreciated. Thanks!

[ChristinaS]

Please read my response. You actually need to ascertain the logic of MA a little more. Ask them. Makes no sense.Do they generally hire remote employees or did you get some exception there?

[ChristinaS · Accepted solution]

Thank you for the great detail! The state that you work in when you work remotely depends on whether your location is based on their convenience or yours. In other words, if the office was in MA, but they "let you" work in NJ, then you worked in MA. The headquarters of the company doesn't matter as much as where your office base was.

Since you lived in NJ, they either a/ had an office for you in MA (whether you opted to go there or not) or b/ didn't want to register with NJ for having an employee there or c/ made a total mistake.

I couldn't tell you whether you should have paid taxes to MA without understanding their logic more. Did you ask them why they withheld for MA? You should.

Either way, you have a part year resident return with NJ. You also need to file a nonresident return with MA if its because of an available office.

But why all of a sudden allow you to work from home in Florida? (the fact that they didn't withhold taxes means they are now treating you as working from home).  Did you work for the same company?

Based on your Florida W2, you worked in Florida and lived in Florida. So that would be "easy" if correct.

[swsh90]

Hi Christina, first of all, thank you for your detailed response. I'll provide a few more details below. To answer your question, no, I started working for a different company since I moved to Florida.

Before August, I worked as a remote contractor employed by a staffing agency (where the address is based in GA) to work for a company based in Boston, MA. So while my assignments were for a company based in Boston, I was technically hired by this staffing agency on paper. I'm assuming this is why it says MA on the state tax section of my W2. (Now that I added some explanations, do you believe this is a valid and logical reason for my tax to be withheld from MA?)

Since August, I came to Florida as a contractor-on-site. I started working for a company located in FL (different company from the previous one), but also this time, I was hired by a third party staffing agency (this time based in NY) to work for a company here in Florida. This time, on W2, there was no state tax that seemed to be withheld from me.

Please let me know if this makes more sense now. If so, what would be the tax returns that I need to complete? Once again, thank you very much.

[swsh90]

Also, does this mean I "earned my income" from MA and not NJ since the company withheld the tax from MA? (this was one of the questions I was unsure how to answer on turbotax deluxe yesterday.)

[ChristinaS]

Thank you the additional info. Yes, your MA wages are MA source. You have a nonresident MA return and a PY NJ return. You get a credit on NJ for the taxes you paid to MA.
You owe taxes on the money either way, and may or may not owe more taxes because of having to file MA. However, it really comes down to whether working from home was your convenience. According to the W2, it was and that means you have a MA return. To not pay taxes to MA, you would have to allocate 0 wages to get all of your withholding back. MA will likely question this.

[swsh90]

Yes, working from home was my convenience. Here's what I understand from our conversation. I need to file a non-resident tax return for MA to get the credit for the taxes I have paid in 2016. I can use the credit I get from MA to pay my partial NJ resident tax return. I won't have to file FL tax return because they don't have one. Is this correct?

I didn't quite get the last paragraph about the part where allocating 0 wages to get all of my withholdings back.. I would rather pay my taxes in full without having them be doubtful about something..

 Please stick with me with more patience! This is my first tax return to file and you're being a tremendous help!! 🙂

[ChristinaS]

Not quite. You file a nonresident MA return because you owe taxes to MA because you worked there. You file a NJ return cause you lived there. You get a credit on your NJ return for taxes paid to MA.
The last part was IF MA was withheld in error. Disregard that, as you just confirmed that you worked from home for your own convenience.

[ChristinaS]

You're welcome:-)

[swsh90]

Okay, thank you very much! I will come back here to ask more questions if anything comes up when filing my taxes.. I think I'll be fine thanks to you though. Have a nice day 😄

[ChristinaS]

Thank you, but please post new questions with a new thread/ question. I think we covered your situation, and we do have a lot of work requirements here that make it difficult to keep answering on a same thread. Also, I don't work 24 hours a day or all weekend:-)

[swsh90]

yeah, got you! I will open a new thread should any new question comes up..!

[ChristinaS]

Thanks:-) And thanks for being appreciative. We could use more of that around here sometimes.

[swsh90]

Of course. It's the least I could do. Have a great weekend!

[ChristinaS]

You too!