A common aspect of the COVID-19 pandemic over the past year or so has been more employees working remotely, but that doesn’t necessarily mean all those people were working from their homes.
Whether it’s been employees from the north who have migrated to residences in the south during the winter, or people choosing to work remotely from what are normally vacation homes, many have taken the opportunity to work remotely in a separate state from where they reside.
More than ever due to the pandemic, that is leading to some tax complexities.
Workers who decided to set up shop in another state could end up paying more in taxes to multiple states, according to CNBC.
Each state has its own set of laws and rules in terms of remote workers filing taxes.
For example, Maryland, Pennsylvania, Virginia, West Virginia, New Jersey and Washington D.C. all have reciprocity agreements with their neighboring states to avoid workers having their income taxed twice.
States such as Connecticut offer a tax credit to offset the income workers pay in a different state.
Of course, this leads to some believing that the best course of action is to simply not tell their new state that they have been working and making money there for a few months.