![]() “It can become a problem for the employer if the employer had no nexus in the state and now because of employee presence, the employer becomes subject to taxation in that state.”Īlthough creating a nexus might not affect you as much as your employer, it’s worth thinking about - especially if you work for a smaller company or if your employer isn’t aware that you’ve been working out of state.īecause income is taxed based on the state where you physically earned it, and because every state has slightly different tax laws, teleworking from outside of your company’s state could mean tax penalties for the business. ![]() “When an employee works from home or an office in a state other than the employer’s home state, that can create a physical nexus for the employer,” explains tax attorney Allie Petrova. 5 critical tax implications you need to know aboutĪlthough this might sound like something from outer space, it’s not, and creating a nexus could hit too close to home for you this tax season.Here’s everything you need to know about working remotely and what it could mean for your taxes this year. Whether you moved, spent a good part of the year traveling, or just recently started to earn money from your house, working outside of the state where your job is based can have some pretty messy consequences when it comes to time to file your taxes, including the possibility of paying additional tax. And although this might have changed things for the better for some workers, there are still a few things to consider in this new world of remote work - like the tax implications. No longer just for the lucky individual, working from home became a company-wide necessity in some cases, with thousands of workers permanently trading in their offices and coworking spaces for more COVID-19-compliant situations.įor some, the indefinite possibility of telecommuting turned into a unique travel opportunity or even a chance to relocate to their favorite rural destination while maintaining a big-city job. ![]() ![]() Since the coronavirus pandemic began nearly three years ago, an unprecedented number of people have started working from home. ![]()
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