Navigating New York “Convenience Rule” for Remote Employees

Navigating New York “Convenience Rule” for Remote Employees

The rise of remote work has led to the adoption of the Convenience of Employer Rule in several states. New York was the first to implement this rule, followed by Connecticut, Pennsylvania, Arkansas, Delaware, and Nebraska. Under this rule, employees working for a business in one state but remotely from another state are subject to their employer’s state tax laws.

The Convenience Rule allows states to tax income earned by employees physically present within their borders, potentially leading to double taxation for individuals. New York’s version of the rule permits taxing NY-based employees for days worked remotely outside the state if done out of convenience, not necessity. There are certain exceptions that you may qualify to bypass this rule such as having a “bona fide employer office” allowing non-resident workers to avoid double taxation.

FAQs:

• How to establish myself as an out-of-state employee for NY tax purposes?
• What are the exceptions under the convenience rule & how do they work?
• What can be done proactively to minimize taxes?
• Will my income get double taxed by my residency state and NY?
• What credit am I eligible to offset double taxation?
• How to accurately file my tax returns to maximize my refund and reduce the chance of an audit?

Our team of professionals who are specialized in multi-state tax situations is here to help you understand the above and more. As remote work evolves, the payroll tax legislation will continue to change, and DimovTax is ready to assist in complying with the complexities involved with the multistate tax situation. Contact us below to learn more about how to save taxes!