Slashdot Mirror
Telecommute Tax Relief Gathers Steam
coondoggie writes to tell us NetworkWorld is reporting that backers of new telecommuter friendly tax legislation have high hopes that this might be the year that it sticks. From the article: " If passed, the Telecommuter Tax Fairness Act would prevent states from taxing income that nonresidents who telecommute to an in-state employer earn while working from home. The legislation is aimed in particular at New York, which is legendary for its stance on nonresident teleworkers. It requires those who sometimes work in the office of their New York employers to pay state taxes -- not only on the income they earn while physically in New York, but also on the income they earn at home. This often results in a double tax when the telecommuter's home state expects tax on the income the telecommuter earns at home."
This legislation is aimed to help average workers. There's little benefit for big business or legislators. It will never pass.
This is only fair, if you aren't using the infrastructure of the city you shouldn't have to pay for it.
Please sign petition to restore sanity to our banking system!!!
http://financialpetition.org/
What if my local employer opens a branch office in NYC. Do I owe NY taxes then, even though I don't work there? What if I do some remote administration for that office? What if they're connected via VPN and I occasionally browse fileservers on their LAN? At what point do I cross the line where they mistakenly think I should pay them something?
I'm glad to see this legislation go through, even though I think it's incredibly stupid that there's a need for it.
Dewey, what part of this looks like authorities should be involved?
From the article: "The U.S. Office of Personnel Management encouraged federal agencies to more aggressively promote fuel-consuming options such as teleworking in a September memo."
;)
Darn that Bush. I always knew he was conspiring with the oil companies!
Simpli - Your source for San Jose dedicated servers and colocation!
People being double charged for state taxes is a larger problem then just telecommuters. Many people who live close to a state line and work in another state end up double paying. Sometimes there are forms which can be used to avoid this but they are not widely publicised.
NY has always been a problem with taxing non-residents... whether they telecommute or not.
I used to work in NYC while living in NJ. Even with going in to the office on a daily basis, NY wanted me to report all income (interest, dividends, side job not in NY, etc), then calculate the tax on that, using the non-resident scale, then multiply it by the percentage of my total income earned in NY. Net result is that I had to pay more in taxes instead of paying based solely on money earned in NY.
OCO is Loco
I live in NJ, work in NY. NJ only taxes me on income not subject to tax in NY -- not income not earned in NY. Not sure about how other states deal with state taxes paid to another state.
Sucks anyway for me, since NY state tax is approximately 2.5-3 times the NJ tax, and I derive very little benefit from the NY taxes I pay. But, for telecommuters who sometimes have to work in NY -- nice deal. Makes me want to telecommute and pay the NJ tax rate when I'm working from home.
A scenario though -- if an employer has a telecommuting employee in another state, do they need to pay employment taxes in that state? My company has satellite offices in other states, and legally it's a bit of a pain. Would a company have to file also as a NJ employer if their telecommuting employees were treated as working in NJ while telecommuting?
"Trolls they were, but filled with the evil will of their master: a fell race..." -- J.R.R. Tolkien on Olog-hai
This often results in a double tax when the telecommuter's home state expects tax on the income the telecommuter earns at home.
I am pretty sure that Connecticut is the only state that doesn't have reciprocity for state taxes. IOW, in most states, you can deduct state taxes paid to another state so you don't get double whacked. This is useful for people who live on state borders. Of course, you accountant makes out better.check with your accountant.
The people who really get screwed are those that don't pay any state tax.
Stay in New York, New Yahkuhs.
It probably won't surprise you in the least when I say.... Up yours!
www.wavefront-av.com
Well the parent is TOTAL flame bait, but it does also need to be answered. So here's my non-flame reply.
Businesses choose NYC for lots of reasons, some of which are:
1) Lots of other businesses are there. That makes doing business more efficient, since most of it is done face to face.
2) NYSE, and other cornerstones of the financial world are located in NYC
3) Vast numbers of people to employ
4) Several world-class Universities are located in NYC or its environs, so there is no shortage of brain-power
All of these things in one way or another rely on taxes, be it for transportation or other infrastructure.
And btw, if you are employed by a company in NYC, you are taking advantage of NYC, even if you never go there. The fact is without NYC, that particular job wouldn't exist.
No, I'm not a New Yorker. I live in Boston.
Thou shalt not begin a subject line or post with the word "Umm".
How should NYC pay for the costs of legislating, policing, and judging the protections of the workers while they're telecommunting to NYC businesses? Or any of the other municipal/state costs that keep NYC such a great place to work, even virtually?
I can't tell whether or not you're joking.
I'm sorry, but if I'm telecommuting into an "office" in NYC, I'm using zero services from the City of New York, that are not already being paid for by my employer there.
If I keel over at my desk onto my "virtual office," NYC isn't going to pay for the ambulance to come pick me up. When I flush the toilet, it's not NYC's sewage system that the waste is going to go into. The only reason I'm commuting to NYC at all is because there are (presumably) other people there that I want to communicate with -- after all, "telecommuting" is just a fancy word for communicate -- and those people pay taxes. So NYC is still getting their cut for the value they're providing.
This whole argument is ridiculous. What happens if a person in New York and a person in Des Moines have a discussion over a forum or Wiki, that's on a server in a colo in San Francisco. Should both people pay tax in SF? They're "working" there (they may not know it), aren't they? Oh wait, SF has already been paid -- by the company that runs the colo facility. Likewise, if I "telecommute" into NYC, whoever I'm commuting in to see is paying taxes.
New York City isn't doing anything to make itself a "great place to work virtually," they just happen to have a lot of people living there. Those people live there and pay taxes, but there's no reason why people not physically residing there should.
Your argument fails to make any sense.
In my mind, the problem here is why companies that have telecommuting employees insist on keeping them based, on paper, in NYC. If the guy works form his house in Jersey, put that down as his work location. If he works from the North Pole, put that down on his W-2. I've done remote-work jobs, and I've never used the location I'm calling-in to as my work location: I use whatever piece of ground I'm sitting on while I'm doing the work.
Computer do a lot of things, but they do not allow you to physically be in two places at the same time. All of this "tele-work" stuff just confuses the issue, which is inherently just a person sitting somewhere, in front of a computer and a telephone, talking to some other people, in a different place. There's no reason why this should be difficult to figure out.
"Ladies and gentlemen, my killbot features Lotus Notes and a machine gun. It is the finest available."
How should NYC pay for the costs of legislating, policing, and judging the protections of the workers while they're telecommunting to NYC businesses?
Ever been mugged on your vpn?
"We returned the General to El Salvador, or maybe Guatemala, it's difficult to tell from 10,000 feet"
If passed, the Telecommuter Tax Fairness Act would prevent states from taxing income earned by nonresidents who telecommute to an in-state employer while working from home.
Why not just go all the way and not tax income?
Support the FairTax
well, more or less, try http://www.fairtax.org/ for a different method of taxation that would not care what state you earned the money in or from.
Support NYCountryLawyer RIAA vs People
Once again, this is one of many obnoxious pitfalls of income taxes. Support the Fair Tax, both at the federal and state levels.
-jcr
The only title of honor that a tyrant can grant is "Enemy of the State."
I telecommute from suburban Philadelphia to ... well, thats a good question. My employer has an office in NYC that is home to about 6 people, but it also has an office in LA and Nashville, as well as London, Paris, Berlin and Tokyo. Even if I used my company's computing equipment (I don't), it would be hard to pin point exactly what is special about the NYC office other than its my nominal "designated office".
My home neighbourhood is the one that faces expenses from my presence here - theoretically I will drive to and from home more often given than I work at home, I will use more local services because I am at home etc.
But wait. If I commuted to work, I'd be driving those same roads every day whereas by telecommuting I drive them hardly ever. Moreoever, if I returned to my life as a stay-at-home parent, I'd be using local services even more (parks, libraries, stores and more), and paying nothing "extra" to do so. So who is winning and losing here? NYC incurs costs that are asymptotically zero from my designated office location being there. My home neighbourhood incurs costs that are either identical with or lower than the ones that would be involved in me not working at home. I pay state taxes anyway, and am glad to pay for the provision of state and local government services. I just can't see how my telecommuting has anything to do with my specific case. I live and work in Pennsylvania for a company with a world wide presence and an office in NYC. I pay taxes to Pennsylvania (gladly!) and that helps pay for the services I use, and would continue to use even if I were unemployed and paying no taxes.
What's the claim that NYC should collect taxes from me?
Are you sure about that? I have helped a coworker who moved to/from NJ/NYC a couple years and had to deal with part-year resident forms on both sides. If you make 20K while living in NJ and 40K after moving to NY (and from a NY source), only 20K is taxable in NJ. Part-year resident tax forms for NJ are much less tedious than NYS/NYC PY resident tax forms (where you have to do a column for what's on your fed forms, another for what portion was NY state, etc).
From NJ 051040i.pdf p17
Filing Requirements. Any person who became a resident of this State or moved out of this State during the year is subject to New Jersey income tax for that portion of the income received while a resident of New Jersey. Part-year residents must file a resident return and prorate all exemptions, deductions, and credits, as well as the pension and other retirement income exclusions, to reflect the period covered by the return. A person who receives income from a New Jersey source while a nonresident must file a New Jersey nonresident return.
Are you saying big business wants to pay a 50% premium on consulting services?
===== Murphy's Law is recursive. =====
At this very moment, my butt is parked in an Michigan office with a tie around my neck doing work I could do at home in my bunny slippers.
You can post on Slashdot in your bunny slippers? Who knew!
God invented whiskey so the Irish would not rule the world.
The idea is this:
.
.
The people of a nation collectively put together a pile of money in order to do useful things which everybody agrees they need. Right? Building roads and water supply systems, police agencies, hospitals etc.
But then. .
Who gets elected? Why, the people who are cut-throat and unfair in their methods. The ones who lie the best. --The ones who are drawn to power!
Why do they win? Because they use all the normal tools to get elected which good people have, PLUS they also use lies and underhanded manipulations. They win over good-hearted people because good-hearted people limit themselves to only using above-board tactics. And so, with limited tool-boxes, the good guys tend to lose more often than the criminals, who arm themselves, not just with above-board tactics like posters and election promises, but also with wonky voting machines and hate-based propaganda about how they will punish, 'welfare moms'. (Which make up a microscopic fraction of the public spending in even the most socialist of nations). But Hate and Dark Side emotions are much easier to kindle in a voting public than rational thought. And anybody who is above hate will lose their vote anyway to a fixed voting machine. And if that doesn't work, the state-owned media will just lie about who won. Or they'll just kill the honest politicians in plane crashes. One way or another, the Dark Side wins time and again. The good guys don't stand a chance once the bad guys get in and own the game board!
So these greedy, morally bankrupt politicians and their industry-owning friends realize, "Hey! Check it out. With my brother-in-law in office, I can get all kinds of policies passed which entitle me to a big slice of that nice juicy public cash pie without my actually having to earn it! People are plenty stupid, they'll believe any old lie, and we just have to organize it so that the state has all the guns. Keen! I can live high and never have to put in a real day of work ever again!"
And so it goes.
But. .
Because the greedy are greedy, they never feel like they have enough, and so the taxes rise, and the hidden taxes, (such as oil and energy), rise. And they cut away at the actual things a nation would probably want, like education funds and medical care. (You just trick the people through massive propaganda into believing that such things are bad for them. Sounds insane, but look around you.) With social spending cut, there's more money for the greedy politician and his friends and family.
But somehow. . , even with the billions flowing into the politician's family coffers, it's still not enough. This is because greed is NOT good. Greed is a disease! --And so the greedy looked around to find new ways to make even more money, and they realized that it was advantageous to them if the other nations of the world never achieved first-world status. Cheep, 1-cent an hour labor is a great way to get and stay rich! --So they use the secret-service agencies to subvert and de-stabalize nations on the brink of industrial success. This is done through funding coups of legitimate foriegn leaders and channeling heavy narcotics trade through those nations. Drug corridor nations quickly become user nations. (The Opium War in China was a good example of how drugs were used to destroy a nation's growth momentum.)
But high taxes and hidden taxes and entire slave nations are still are not enough for the greedy. Nope. --So they start wars, filling the people with fear, all to ensure that the people are too afraid to think rationally and otherwise recognize that they are being abused by their own government. --Plus, the weapons sales are another excellent way to cut into that nice juicy public cash pie!
So what percentage of your tax dollars do you think are being spent on things the collective public actually wanted in the first place? 30 percent? 20 percent? I'm willing to bet it's even less.
So what do you do about it?
Well, you can't
Yes, but Washington DC wasn't supposed to be a city in the conventional sense. It was supposed to be the seat of Federal government, period. The only people supposed to be living there would be Federal employees who weren't supposed to have a direct say in their own authority.
Not exactly what happened. The problem had nothing to do with "Taxation without Representation" it had to do with the fact that the law was missing a few words which made it only apply to Miami. That was what the court said was not allowed in Florida. The state law that authorized the surcharge said the surchard could be levied by cities facing a financial emergency if they had a population of 300k on a certain day. By writing it this way it applied only to Miami and the courts found that unconstitutional. After they court ruled they simply rewrote the law to include "and from that day forward" so that any city of 300k in Florida facing the same problem could put a surcharge on parking. That was ruled OK and the surcharge was put back in place.
The first rule of posting in bunny slippers is not to talk about bunny slippers!
Although I sympathize with telecommuters (I have state residence in NYC, but currently work in Beijing for a client in Atlanta) I doubt this law will end up helping us much. NY goes after a lot of telecommuters because a lot of companys use remote offices as a way to get around paying tax, not because they want to go after the 'little guy on a terminal in Michigan'. The same reasoning applies to people working in NYC but living in NJ or elsewhere, we ask them to pay NYC tax because the City is providing all the infrastructure necessary to help them become successful. It's just not fair for someone to make money because of all the effort and local tax dollars spent to make NYC a good place to do business and not contribute to that effort.
I hear you when you say that why should I pay if I don't live there or if I don't go there to an office. But your clients do live there or work there and they are there because of the huge investment in tax dollars to make NYC a place for you to find clients. Otherwise you'd just find local clients. So it's reasonable to ask for you to pitch into that community effort. I think we just need to come up with a better way to measure that 'pitch in' amount and make sure it's directly tied to your direct benefit and not to pork projects in upstate NY that primarily benefit politicians trying to hold on to thier positions.
My feeling is that this is just another wedge issue, like the marriage penalty tax, that certain people in Washington will use to push through more tax cuts for the wealthy or for corporations. We will get our commuter tax 'relief' but 100 times more in tax breaks to people with enough already will be attached to it.
Personally I think all taxes are too high, but I am wary of people in washington with an agenda riding my annoyance to push through things I am not in favor of.
Peace, or Not?
As you can see, taxing you based on your total income is the only way to ensure that you're paying the same amount in tax as someone who earns the same amount in one state.
You're missing the point. Income wholly in one state shouldn't affect the other state's tax revenue. NYC has no claim on income in NJ just because I also work in NYC some of the time.
"We returned the General to El Salvador, or maybe Guatemala, it's difficult to tell from 10,000 feet"
(Pardon me while I play point/counter-point with myself)
Are you suggesting violence? Well, that's stupid. It's a good way to create a lot of misery and chaos. --In particular, it's a good way to give the administration an excuse to let loose with its big guns and really enact a lock-down. Sorry, but you don't have enough fire-power to contest the government. Have you not read your Machiavelli? He described the very tactic; essentially, political judo with guns. You don't want to go there.
No, the way to go is to fight ignorance. If everybody, including the dupes in the police force and armed forces who are doing the Dark Side's bidding, (and I'm willing to bet it's only some of them), if those guys woke up, then who would remain to heil Bush?
Fight ignorance. If you can wake people up, then you can start to solve things; all the raw workings of the solution are built right into the American system. It just takes awareness and will to make things change.
Enlightened people need not be abused.
-FL
You may be misreading your weekly pay stub.
The state tax refund is treated as "additional" income because it wasn't taxed to begin with. It's withheld from your net paycheck and, therefore, not taxed as income at that time. When you get it back via refund, it goes back in the "taxable income" column and is then taxed - after the fact.
The feds do the same thing, in case you haven't noticed. You're supposed to declare any state tax refunds on your federal return.
In all cases, the one-year-free-loan is accurate, though. And you can adjust your W-4 to deal with that (declare more 'dependents'). Instead of overpaying, just resign yourself to paying at the end of the year, but in which case you get to keep more of your earnings.