Results for: Telecommuting

New Jersey and Connecticut are offering tax credits to residents who successfully appeal New York’s requirement that out-of-state workers pay personal income tax to New York, even if they work remotely. This is due to the loss of hundreds of millions of dollars in tax revenue each year. The neighboring states have implemented “retaliatory” tax rules affecting New Yorkers working remotely for their companies, but these workforces are far smaller. The issue has been ongoing for decades, and a legal challenge may be necessary to overturn the rule entirely.

Telecommuting, once a pandemic-era novelty, has become a permanent alternative for many employees. However, this has raised questions about why New York-based companies’ employees in Connecticut and New Jersey must still pay personal income tax to the Empire State. Fed up with losing tax revenue, New Jersey offers a tax credit to residents working from home who successfully appeal their New York tax assessment. Connecticut is considering a similar measure. Out-of-state commuters who work for New York-based companies are required to pay New York income taxes, even if they rarely go into the office, unless they meet strict requirements for a bona fide home office. New York’s decades-old policy has created a financial burden for neighboring states, prompting them to consider legal challenges and retaliatory tax rules.