![]() Equity compensation is, generally, deemed to be earned ratably between grant and vest and for some states, from grant to exercise for stock options. To be considered a California nonresident, an individual may need to take steps to change their residency, such as obtaining a new driver’s license or register to vote in the new state.įor nonresidents, the general rule is that they are taxed in a particular state on income earned in that state. In fact, California ignores temporary and transient absences when determining residency. In October 2020, California published guidance noting that a temporary absence from California does not break residency. The general expectation is that tax residents pay state income tax on all their income even if they are temporarily absent from that state. ![]() ![]() In general, the tax guidance published by states was not surprising. ![]() Many published tax guidance for remote workers and their employers. Guidance from state tax authoritiesĪs the number of employees who moved to work remotely from another state or country became clearer, states began to realize that remote workers who had moved from another state were a good source of tax revenue. Some states, such as Hawaii, implemented programs to attract remote workers from other states in an effort to support local businesses whose incomes had been adversely impacted by a decimated tourist industry. This is an important issue but will not be addressed in this article). (Note: Some of this guidance was related to whether a remote worker trapped in a state during the shut-down would create a corporate tax presence for an out-of-state employer. At the start of the pandemic, several states allowed tax exemptions for nonresident employees who found themselves trapped in that state during the initial shut-down. State mobility came to the forefront with several articles in prominent newspapers noting this phenomenon. However, the pandemic led to a sudden increase in remote working with many employees deciding to work in a state that was different from the one in which they were employed. For many companies, domestic (state-to-state) mobility compliance was an add-on or an afterthought. ![]() However, any allowance claimed for days worked outside New York State must be based upon the performance of services which of necessity, as distinguished from convenience, obligate the employee to out-of- state duties in the service of his employer.Prior to the COVID-19 pandemic, the focus of most mobility compliance programs was primarily on global mobility. I looked at this page from NYS that was mentioned in the answer by That language does at first glance seem to lead to a different answer, but the ruling in the tax memo seems to say that if you're out of state only for your convenience then the services were performed in NYS for NYS tax purpose. The NYS tax document governing this situation seems to be TSB-M-06(5)I. New York state taxes all New York-source salary and wage income of nonresident employees when the arrangement is for convenience rather than by necessity (Laws of New York, § 601(e), 20 NYCRR 132.18). If the arrangement is necessary to complete the work, then you should have no NYS tax. NYS will tax this income if the arrangement is for the convenience of the employee. This question came up again ( Living in Florida working remotely - NY employer withholds NYS taxes - Correct or Incorrect?) and the poster on the new version didn't find the existing answers to be adequate, so I'm adding a new answer. ![]()
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