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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.
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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!
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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!
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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.
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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"
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 would be surprised to find any instance of double taxes anywhere. I think the summary is just plain wrong.
You get a tax credit from your home state for taxes paid in the state you work in. Or the other way around.
If it didn't work that way, there would've been a revolt long, long time ago already.
In Soviet Russia, I ruled you
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
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.