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Telecommuters May Owe Extra State Taxes
marct22 writes "According to Cnet News, the US Supreme Court refused to hear an appeal by a Tennessee programmer who was forced to pay extra taxes because he was telecommuting to a job in New York. Apparently he worked in NY 25% of the time, which he didn't argue about, but the other 75% of the time he worked from home in Tennessee, which doesn't have income taxes. Also, it appears that right now, for those of us who live in one state and telecommute in another may be doubly taxed if both have income tax. There is a Telecommuter Tax Fairness Act in the Senate, but it has not emerged from committee so has not been voted on."
If both states have an income tax he would get a credit on his resident state tax return for the income taxes he pays to New York. You only pay tax to one state for the same dollars of income. This guy is unusal because he lives in one of the few states without an state income tax. If he lived in North Carolina and did work in New York... He would bay tax on the Non-Resident New York tax return and then claim a credit for that tax on his North Carolina tax return. This is the way its been for years....Nothing to see here.... Nothing new here......