NYS NON-RESIDENT TELECOMMUTERS - NYS INCOME TAX
/One question we received recently is whether an employee of a NYS business who lives in NJ is still subject to NYS income taxes even if due to the pandemic they telecommute.
NYS previously provided guidance on this issue, which provides as follows:
My primary office is inside New York State, but I am telecommuting from outside of the state due to the COVID-19 pandemic. Do I owe New York taxes on the income I earn while telecommuting?
If you are a nonresident whose primary office is in New York State, your days telecommuting during the pandemic are considered days worked in the state unless your employer has established a bona fide employer office at your telecommuting location.
There are a number of factors that determine whether your employer has established a bona fide employer office at your telecommuting location. In general, unless your employer specifically acted to establish a bona fide employer office at your telecommuting location, you will continue to owe New York State income tax on income earned while telecommuting.[1]
They also cite TSB-M-06(5)I, which goes into more detail of the “convenience of the employer” test. Therefore, NYS continues to tax this income and employers should continue to withhold. However, we are aware of New York Senate Bill S.8386 and litigation (New Hampshire v. Massachusetts, No. 22O154 (U.S. filed Oct. 19, 2020)) which may affect this issue. Stay tuned.
Please do not hesitate to contact us with any questions.
[1] https://www.tax.ny.gov/pit/file/nonresident-faqs.htm#telecommuting