Question

Working from Home Out of State

Forum|Forum|2 years ago
February 27, 2024
1 reply
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I live in Maryland and work from home. My employer is located in New York. According to New York's definition of New York sourced income, one of the criteria is "services performed in New York State." Since I am physically in Maryland when performing my work, is my income "New York source income" and am I required to pay income taxes to New York?

Not A Product Question

V

Vanessa A

Probably not, but it depends. Do you go to NY to work at all? If so, then any time you spend working in NY would be considered NY source income. Also, NY has a Convenience of the Employer Rule. Basically, this rule says if you are working remotely for your convenience then you are considered to be working in NY. If you are working remotely for your employers convenience, then you would not be considered to have income from NY sources.

Ex. if you are working remotely because you don't want to commute, but the company has an office for you on the days you do commute, then this would be NY source income and taxable by NY. In this situation, you would need to file a NY nonresident return and then file a MD resident return claiming a credit on your MD return for taxes paid to NY.

If you have never stepped foot in NY (for work purposes) and your work was 100% remote, and you did not live there during the year, then you would not need to file a NY return or pay taxes to NY. All of your income would only be taxable by MD, not NY.

In summary, if your employer hired you as an MD resident to work from home and NOT in the office, then you would not need to pay taxes on the income you receive working for the NY based company.

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D

DavefeldAuthor

Thank you so much for the prompt reply. Two clarifications to my situation:

1) I am required to appear in the NY office 12 day a year. Otherwise, all of my work is remote.

2) When I was originally hired, I was living in New York. I moved from New York to Maryland last year.

Is my income considered "New York source income" since, except for the 12 days I'm required to work from the New York office, I perform my services in Maryland?

Thanks again.

Hal_Al

I spoke to our payroll person about the taxes, and they said they only do it because they have so few remote employees and this is the way they have always done it. She is also not a CPA.

From the link you sent, I meet several of the conditions to be considered a bonafide office.

"From the link you sent, I meet several of the conditions to be considered a bonafide office"

Add them up and see if you meet one of the requirements.

"In order for an office to be considered a bona fide employer office, the office must meet either:
a) the primary factor, or
b) at least 4 of the secondary factors and 3 of the other factors"

Q. Do I need to fill out my W4 for NY in a particular way?

A. No. There i nothing on the NY IT-2104 to cover your situation

Q. Do I need to pay the taxes through out the year and then complete my taxes in a particular way to receive that paid money back?

A. Yes. You file a non-resident return and allocate your income as NY source or not NY source.