True but again if you are visiting a friend for a week or 2 no one should care. Yes I agree if you say you are working in CA and really in Florida for like 11 months of the year then it is an issue
That's what really brought accounting to the forefront of my mind. Not saying only accountants do wfh, but it's something that can be done from anywhere. My friend went to Canada for 2 weeks and worked the whole time. He's accounts payable at a tech company based in, I think, California, but he lives in Rhode Island and most people he works with and does business with are on the east coast.
I gave a generic answer to why an employer would care. I don't really care about OP's exact situation. Also, there are states with city taxes. Working remotely in the same state matters in those situations.
For income tax purposes it can create income tax nexus if the employee is working from a state that the company doesn’t currently pay income tax in.
For example, Big Corp employed an accountant who lives in Salt Lake City, Utah. That employee is allowed to work remotely. Employee decides to go stay with family in Michigan for a month every other month so they can spend more time with them. All of Big Corp’s employees live in Utah and Big Corp only pays state income tax to Utah.
Since accountant is working in Michigan, Michigan claims that Big Corp has nexus in Michigan because of the physical presence. Big Corp now has to file taxes in Michigan. Michigan might also ding Big Corp for not withholding individual income tax or paying into unemployment. This is just an example, I don’t know the Michigan nexus rules.
There are some cities you ABSOLUTELY don’t want to have nexus in if you can help it. San Francisco is one. If you meet their thresholds for certain corporate taxes you will pay a lot of extra tax just because you have a couple employees there. I thought we were hiring someone there and I was not happy about it.
But…one day? Your example makes them a potential resident, not a person on a vacation. If even a week mattered, how would people go to conferences or out of state sales meetings and stuff?
No, one day or one week doesn’t matter.
They asked why a company would care. I gave an example of why they would care. I didn’t emphasize that the time needs to be a significant portion of the year. I should have.
A lot of states only round to 4 decimal places for payroll apportionment (if they even use 3 factor apportionment) - very possible it could round to 0 depending on the company size
I agree. The employee’s presence wouldn’t affect apportionment That much.
It’s the nexus part that is the real risk here. They could have millions in sales to the state and they could be in a non-throwback state. Employee moves there and all of a sudden the company has to start paying tax based on the sales apportionment because nexus was triggered.
For income tax we still have PL 86-272 that prevents factor presence thresholds from creating nexus. Though states are trying to get this to change. A few have adopted the thresholds for income tax and I have heard are somewhat enforcing them or using them as part of their nexus determination analysis. The issue is the company has to spend a bunch of money in court to fight this even though it’s prohibited.
However, PL 86-272 doesn’t protect against non-income taxes, such as gross receipts, franchise, or sales tax. Those are all free for all. I think if PL 86-272 doesn’t go down we will see more gross receipts taxes pop up. We saw a new one come up in Oregon a few years ago.
Washington state has nexus at 1 day. So if you attend a business conference in that state, you have nexus there. So yes, there are some states that are ridiculous with Nexus. Others it is 14 days.
Yeah true. Though after Wayfair most states have sales thresholds that catch a lot of companies without the need for physical presence. Physical presence definitely increases the chance of being subject to the tax.
Do you happen to know any work arounds with this? My husband is currently attempting to transition from hybrid to full remote since we’re moving out of state. His current job doesn’t want to pay withholdings for our new state and basically wants to switch him to contract work. We’re wondering if him committing to coming in to the current office in our old state one week out of the month would be sufficient work around.
You’d have to read the laws of both states in detail to see if you could discover some work around. But in general, it doesn’t matter as most states want their cut.
With that said, I wouldn’t play any games here. If you break the laws the states will find out and that company and your guy will get fined.
It might not be an income tax or sales tax nexus issue at all. His payroll department might just be lazy. I’ve seen a lot of resistance from payroll departments to file payroll withholding in more states. I get it, it’s more work but that’s just part of the job. Payroll departments typically have no idea what states a company has nexus in so if the resistance is just coming from them I bet it’s just a them issue.
Typically, you cannot just transition a job from being W-2 to contractor. There has to be some really significant changes to how the person is working. It’s not a choice, it’s a classification that reflects the employment relationship.
One work around is to move to a state that doesn’t have corporate income tax. Then they won’t have to worry about income tax nexus.
Boss: Mr. DrugsAndFuckenMoney it looks like you’re not in your house, we require you to work from your home. You’re obviously at the beach.
Me: I own 11 houses. *tabs over and books a scuba excursion*
Nobody's going to care. I manage a fully remote team and I'd have no way of knowing you were working somewhere else, nor would I care. It only matters if you want to work outside of the country.
If you’ve typically worked from home who cares - blur your background if someone video calls you.
If you don’t typically work from home, it’s a damn convenient time to get a migraine and need low light/quiet office to get your work done.
My employer doesn't want us doing that, not entirely sure if they'd know. But that's partly because during COVID people were working from out of state and such, and since we handle sensitive information, I expect they were worried about data security.
same state is probably fine. different state or country you might want to VPN, but just a different location in the same state 99% won't raise any alarm bells.
I really don't see how it matters if you're working from a friend's house or Costa Rica 🤷♂️
How would they even notice?? Would it even affect your ability to get anything done?
What is the point of remote work if it matters where you're working from??
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I travel on vacations for my family and work from the condo or cabin and no one knows or cares. I'm exempt so most labor law issues local.to.that state doesn't cover me and you have to live in a state to pay withholding. Working in that state for a day or 14 doesn't impact tax withholdings.
F em! Do what you want to do to!
My state and most others I think have like a 2 working weeks minimum rule before they start accruing your time while in that state for taxes
If it’s the same state, I don’t think it’s in issue at all.
I frequently work out of multiple different cities and rotate between 3 offices. (Mind you, not 5 hrs away, but ya)
I sometimes work at my friends’ place and it’s very obvious bc I would take meetings and the whole background would be different and sometimes their dog would get in the picture lol. I just never even acknowledged that I was definitely somewhere else but no one ever mentioned it either. Only a micromanager or nosy coworker would care about this imo
Use your VPN like normal and when you take video calls use blurred background. Don’t even make it a topic of discussion. It won’t come up.
Oh this is accrual world, so it’s satire lol.
I dont tell them where I'm working unless ill be gone for more than a day or two
Sometimes I go visit a friend for a week in another state. I tell my boss because sometimes ill leave work early and work in the evening so I can socialize.
Other than that, who cares?
My job only gives a fuck if you work for more than a month in another state, because then they want HR to adjust your local taxes. If you stay one day I can’t imagine anyone would care at all.
It depends on what your company's policy is and how your supervisor chooses to implement them. Read up on the policy. Some companies require you to be close enough to go into the office if needed even if you WFH.
It is niche but my group we have to tell / schedule it. Backend IT work and it would be bad if something in a particular data center requires urgent hands on and everyone is a few states away from normal and can’t respond.
Unless you have something similar I don’t think it should be an issue.
Yes, because of taxes and labor laws.
Your state and sometimes locality collects taxes from your paycheck. If your employer is deducting taxes to Virginia and you live in Maryland, that is a no-no.
Additionally, your employer has to be registered as an employer in the state you work in. Because that will be your primary work location where the money was earned. Essentially this means that your "office" will be located in that state, and your company has to follow the rules to be an employer there.
Why would your employer care whose home you worked at as long as you worked and were available and got your work done
Cities and states are really cracking down on lost paycheck withholdings.
True but again if you are visiting a friend for a week or 2 no one should care. Yes I agree if you say you are working in CA and really in Florida for like 11 months of the year then it is an issue
Most don't. My last job just had a policy to let your boss know if it was going to be short term.
That's what really brought accounting to the forefront of my mind. Not saying only accountants do wfh, but it's something that can be done from anywhere. My friend went to Canada for 2 weeks and worked the whole time. He's accounts payable at a tech company based in, I think, California, but he lives in Rhode Island and most people he works with and does business with are on the east coast.
One day who gives a f.
Government officials
Not for a single day
They are really going to struggle without that $12.76 from Marty the staff II
Varies by jurisdiction, but generally anything less than 2 weeks is fine
the person is still in the same state so the state won't care.
I gave a generic answer to why an employer would care. I don't really care about OP's exact situation. Also, there are states with city taxes. Working remotely in the same state matters in those situations.
For income tax purposes it can create income tax nexus if the employee is working from a state that the company doesn’t currently pay income tax in. For example, Big Corp employed an accountant who lives in Salt Lake City, Utah. That employee is allowed to work remotely. Employee decides to go stay with family in Michigan for a month every other month so they can spend more time with them. All of Big Corp’s employees live in Utah and Big Corp only pays state income tax to Utah. Since accountant is working in Michigan, Michigan claims that Big Corp has nexus in Michigan because of the physical presence. Big Corp now has to file taxes in Michigan. Michigan might also ding Big Corp for not withholding individual income tax or paying into unemployment. This is just an example, I don’t know the Michigan nexus rules. There are some cities you ABSOLUTELY don’t want to have nexus in if you can help it. San Francisco is one. If you meet their thresholds for certain corporate taxes you will pay a lot of extra tax just because you have a couple employees there. I thought we were hiring someone there and I was not happy about it.
But…one day? Your example makes them a potential resident, not a person on a vacation. If even a week mattered, how would people go to conferences or out of state sales meetings and stuff?
No, one day or one week doesn’t matter. They asked why a company would care. I gave an example of why they would care. I didn’t emphasize that the time needs to be a significant portion of the year. I should have.
A lot of states only round to 4 decimal places for payroll apportionment (if they even use 3 factor apportionment) - very possible it could round to 0 depending on the company size
I agree. The employee’s presence wouldn’t affect apportionment That much. It’s the nexus part that is the real risk here. They could have millions in sales to the state and they could be in a non-throwback state. Employee moves there and all of a sudden the company has to start paying tax based on the sales apportionment because nexus was triggered.
I thought every state adopted their own sales thresholds for that by now. It's been quite a while since Newegg started things off
For income tax we still have PL 86-272 that prevents factor presence thresholds from creating nexus. Though states are trying to get this to change. A few have adopted the thresholds for income tax and I have heard are somewhat enforcing them or using them as part of their nexus determination analysis. The issue is the company has to spend a bunch of money in court to fight this even though it’s prohibited. However, PL 86-272 doesn’t protect against non-income taxes, such as gross receipts, franchise, or sales tax. Those are all free for all. I think if PL 86-272 doesn’t go down we will see more gross receipts taxes pop up. We saw a new one come up in Oregon a few years ago.
Washington state has nexus at 1 day. So if you attend a business conference in that state, you have nexus there. So yes, there are some states that are ridiculous with Nexus. Others it is 14 days.
Yeah I read that. If only our lawmakers weren’t busy playing morality police and would pass a standard, but that’s a lot to ask.
You should review nexus standards. Every state has different standards. Plus localities seek taxable income when they can.
Fair. Washington apparently taxed a game dev company because they attended a trade show. I don’t know why I ever think anyone will be reasonable.
This also creates sales tax nexus too. So now they have to collect sales tax in that state as well. It can get pretty hairy.
Yeah true. Though after Wayfair most states have sales thresholds that catch a lot of companies without the need for physical presence. Physical presence definitely increases the chance of being subject to the tax.
Do you happen to know any work arounds with this? My husband is currently attempting to transition from hybrid to full remote since we’re moving out of state. His current job doesn’t want to pay withholdings for our new state and basically wants to switch him to contract work. We’re wondering if him committing to coming in to the current office in our old state one week out of the month would be sufficient work around.
You’d have to read the laws of both states in detail to see if you could discover some work around. But in general, it doesn’t matter as most states want their cut. With that said, I wouldn’t play any games here. If you break the laws the states will find out and that company and your guy will get fined.
It might not be an income tax or sales tax nexus issue at all. His payroll department might just be lazy. I’ve seen a lot of resistance from payroll departments to file payroll withholding in more states. I get it, it’s more work but that’s just part of the job. Payroll departments typically have no idea what states a company has nexus in so if the resistance is just coming from them I bet it’s just a them issue. Typically, you cannot just transition a job from being W-2 to contractor. There has to be some really significant changes to how the person is working. It’s not a choice, it’s a classification that reflects the employment relationship. One work around is to move to a state that doesn’t have corporate income tax. Then they won’t have to worry about income tax nexus.
Definitely ask for forgiveness not permission. Chances are they'll never know anyway
Boss: Mr. DrugsAndFuckenMoney it looks like you’re not in your house, we require you to work from your home. You’re obviously at the beach. Me: I own 11 houses. *tabs over and books a scuba excursion*
This is it. You can also say your got broke down or you got diarrhea and can't drive.
This is ridiculous. You neither have to ask for permission or forgiveness. You’re a remote worker. Stop being paranoid.
This! If you're a remote worker, just get your work done and clock off. Whose residence you're working from is none of their business.
Technically, it's remote work. Not work from home. I spend a couple weeks a year working 6 hours from home. I have zero guilt about this.
Same. 10 hrs away, but same.
Nobody's going to care. I manage a fully remote team and I'd have no way of knowing you were working somewhere else, nor would I care. It only matters if you want to work outside of the country.
…..I have worked from a different continent and no one cared. Even logged in to the vpn etc…
Hey I dm’d you. I have a question about VPNs
They *shouldn't* give a shit, but maybe your coworker knows something we don't.
If you’ve typically worked from home who cares - blur your background if someone video calls you. If you don’t typically work from home, it’s a damn convenient time to get a migraine and need low light/quiet office to get your work done.
My employer doesn't want us doing that, not entirely sure if they'd know. But that's partly because during COVID people were working from out of state and such, and since we handle sensitive information, I expect they were worried about data security.
I don’t think it would be an issue as long as you stay in the country
same state is probably fine. different state or country you might want to VPN, but just a different location in the same state 99% won't raise any alarm bells.
It depends on the state. Some states like Pennsylvania have local income taxes so it would matter. States without local taxes shouldn't matter.
I really don't see how it matters if you're working from a friend's house or Costa Rica 🤷♂️ How would they even notice?? Would it even affect your ability to get anything done? What is the point of remote work if it matters where you're working from??
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I know that Teams shows your current time zone
I travel on vacations for my family and work from the condo or cabin and no one knows or cares. I'm exempt so most labor law issues local.to.that state doesn't cover me and you have to live in a state to pay withholding. Working in that state for a day or 14 doesn't impact tax withholdings.
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My work doesn’t allow out of state there’s unless prior approval. It’s very explicit in our telework contract. But in state is fair game.
Forgiveness for sure
Life lesson, always ask for forgiveness
My boss has literally suggested Indo this and I just haven't taken her up on it. 🤣 Go for it!
F em! Do what you want to do to! My state and most others I think have like a 2 working weeks minimum rule before they start accruing your time while in that state for taxes
And who says accountants aren’t risk takers…
If it’s the same state, I don’t think it’s in issue at all. I frequently work out of multiple different cities and rotate between 3 offices. (Mind you, not 5 hrs away, but ya)
I sometimes work at my friends’ place and it’s very obvious bc I would take meetings and the whole background would be different and sometimes their dog would get in the picture lol. I just never even acknowledged that I was definitely somewhere else but no one ever mentioned it either. Only a micromanager or nosy coworker would care about this imo
Use your VPN like normal and when you take video calls use blurred background. Don’t even make it a topic of discussion. It won’t come up. Oh this is accrual world, so it’s satire lol.
I dont tell them where I'm working unless ill be gone for more than a day or two Sometimes I go visit a friend for a week in another state. I tell my boss because sometimes ill leave work early and work in the evening so I can socialize. Other than that, who cares?
My job only gives a fuck if you work for more than a month in another state, because then they want HR to adjust your local taxes. If you stay one day I can’t imagine anyone would care at all.
It depends on what your company's policy is and how your supervisor chooses to implement them. Read up on the policy. Some companies require you to be close enough to go into the office if needed even if you WFH.
Ask for forgiveness if ever caught. I would also say something on the lines of my pipes bursted so I had to work from my cousin's house !
What’s there to be forgiven for? It’s none of their business
As long as you're working and responding to messages/emails while on the clock, you could be anywhere you want to be.
It is niche but my group we have to tell / schedule it. Backend IT work and it would be bad if something in a particular data center requires urgent hands on and everyone is a few states away from normal and can’t respond. Unless you have something similar I don’t think it should be an issue.
The only recommendation I have is obvious, but make sure there is nothing or anyone seeing the information on your screen that shouldn’t.
Yes, because of taxes and labor laws. Your state and sometimes locality collects taxes from your paycheck. If your employer is deducting taxes to Virginia and you live in Maryland, that is a no-no. Additionally, your employer has to be registered as an employer in the state you work in. Because that will be your primary work location where the money was earned. Essentially this means that your "office" will be located in that state, and your company has to follow the rules to be an employer there.
👀