Jurisdictional Disprudence
This strikes me as very wrong. You telecommute from Tennessee to New York, going to NY in person only seldom. New York requires payment of taxes on 100% of your income from the NY employer.
All well and good, but what if your state also has income tax, and also claims tax on that money? I can just see dueling state tax agencies. Or perhaps they’ll be playing tug of war, with the telecommuter in the role of rope.
Jay, I don’t know about New York or Tennessee, but we experienced a dual state tax year a couple of times. In our case, we had to pay 100% of the taxes on the earnings in each state to that state only. For example: 10,000 total income with 7,000 from state 1 and 3,000 from state 2. state 1 only taxes the 7,000, state 2 taxes 3,000. federal covers all 10,000. I hope this helps a little.
Posted by Denise on 03/31 at 02:10 AMCorrect. That is the standard procedure. Deb’s 2004 income in CA will not get taxed by MA.
This is different. You are a resident of MA, telecommute to CA, so CA wants the taxes… but what if MA does too because you were after all resident there and earning the money in MA. That is the scenario. Not living two different places. Not physically working in a neighboring state, commuting from your home state.
All it takes is for two states both to claim the income of a full time telecommuter and we have a federal court case required to settle it definitively.
Posted by Jay on 03/31 at 12:25 PM
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