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How does working remotely affect my state taxes?

SOLVEDby TurboTax271Updated May 10, 2022

Depending on which state(s) you worked remotely in and for how long, you may need to pay income tax in more than one state. Each state has different guidelines, so it's important to look at individual state rules to determine if you need to file for that state this year. Review the nonresident and part-year resident filing rules for each state remotely worked from in 2021, and determine when income earned becomes taxable to that state.

Some states have a reciprocal tax agreement, also known as reciprocity, which is an agreement between two states that allows residents of one state to request an exemption from tax withholding in the other (reciprocal) state. This can save you the trouble of having to file multiple state returns. You can see which states have reciprocal agreements.

Some states provide temporary waivers for state withholdings and tax liability for remote work. For example, Illinois allows 30 work days in the state before income earned in the state becomes taxable to Illinois. However, other states begin taxing income for remote work performed in the state from the very first day.

Six states—Connecticut, Delaware, Massachusetts, Nebraska, New York, and Pennsylvania—follow an employer “convenience rule” which taxes you where your employer’s office is, even if that is not the state you are actually working in. 

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