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Businesses are pushing lawmakers to streamline income tax requirements so that workers and employers don't risk a double tax and taxation by different states as the months of telework persist. http://btaxgo.com/Clnei1N
Before the pandemic, 31% of workers telecommuted at least once a week. At the height of the pandemic, 75 million people worked from home.
Payroll is used to handling tax withholding obligations for multiple states. But once workers fled cities, daunting questions arose.
Payroll is used to handling tax withholding obligations for multiple states. But once workers fled cities, daunting questions arose.
Three primary tax problems have emerged, said Alice Jacobsohn, director of government relations for the American Payroll Association 
Americans working from locations beyond the employer’s home state became subject to state and local income taxes in a second state.
Americans working from locations beyond the employer’s home state became subject to state and local income taxes in a second state.
A second potential problem involves the presence of teleworkers in a new state, potentially triggering tax nexus. Many employers fear the arrival of mobile workers in new states will cause revenue departments in those jurisdictions to assess corporate income taxes.
A third problem is telecommuters could disrupt the protections afforded by Public Law 86-272—a federal law that bars states from imposing income taxes on an outside business if activities are limited to “mere solicitation of orders” for the sale of tangible personal property.
