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LearnFAQTax Optimization

I work remotely for a company in another state — which state do I pay taxes to?

Answer

Generally you owe state income tax to the state where you physically perform the work, which for a remote employee is usually your home state, plus tax to your resident state if different. The complication is the 'convenience of the employer' rule used by a handful of states including New York, which can tax a remote worker on the employer's-state income if you work from home for your own convenience rather than the employer's necessity. That can create double taxation your resident state's credit doesn't fully offset. Also watch for creating tax nexus for your employer or triggering a filing requirement if you travel to the office. Check both your state's and the employer's state's rules, keep records of where you work each day, and consider a professional if you're in a convenience-rule state.

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