Move form Connecticut to Florida

[Art O]

Hi, my family and I recently moved from Connecticut to Florida.  I have moved to permanent remote work.  My question is whether I will need to continue to pay Connecticut state taxes as a Florida resident since the company I work for is located in Connecticut.  Thanks!

[dclick]

Generally, your income tax is based on where you're physically located when earning the income. So, if your job's office is in state A, but because of the pandemic you're living and working full time in state B, you'd pay income and all other taxes to state B.

In this instance, you'd still be responsible for taxes for the period you lived in CT. You will file PY resident returns for each state and allocate the income received. You would also want to make sure you update your withholding information with your employer to reflect the move.

I hope that helps!

-Dennis

[Art O]

Thanks for the quick response!  I have already updated my tax status to FL (we moved 6/30) and my company discontinued taking CT state taxes from my check and will file a PY resident return this year.  This is unrelated to the pandemic and a permanent move to a new state. 

I guess I'm a little concerned/confused about about the "rule of convenience" and if that would apply to me since I will still be an employee of a CT based company although an FL resident?

Thanks again!

[dclick]

I definitely understand your concern.

Typically rule of convenience matters apply from the employer perspective, not the employee perspective, the tax foundation has an excellent write-up on it, and it is the subject of many state level tax cases:

"Under these provisions, an employee is treated as if they work in their employer’s state if their work is performed elsewhere for what is termed the “convenience of the employer”—but convenience is defined very broadly, and the exceptions tend to be quite narrow. States have not always done a good job of spelling out what is meant by “convenience,” but generally the only exceptions are for when an employee’s work legitimately could not be carried out in the employer’s state."

Generally, however, the taxpayer’s domiciliary state is likely to assert that income earned while both living and working in their state is rightfully theirs to tax, concluding that just because an employee’s office is in another state does not mean that her income is “derived from sources outside the state,” so when a state with a convenience rule (or a temporary sourcing rule like Massachusetts’) steps in and asserts the right to tax it as well, the result is double taxation.

While CT is one of a rare handful of states that has used this rule, and the possibility always exists they could attempt to assert a claim to taxation of income, the general rules from our previous discussion typically apply.

https://taxfoundation.org/remote-work-from-home-teleworking/