FL resident working from home for an office in NJ

[ptax255]

Hi, my client is an FL resident working from home for an office in NJ. W-2 had NJ tax withheld. Is that correct? I thought only convenience states taxed regardless of where work is performed.

[qbteachmt]

"I thought only convenience states taxed regardless of where work is performed."

This?

"Connecticut, Delaware, Nebraska, New Jersey, New York, and Pennsylvania have a “convenience of the employer” rule, which states that if the employer requires the employee to work in another state (i.e., for the employer's convenience), then withholding is only taken in the location where the work is performed."

https://www.cpajournal.com/2021/08/20/remote-work-arrangements/

[ptax255]

Is this new for  NJ? I'm reading different things on different articles.

"In addition to Connecticut and New York, there are four other states that impose the convenience of the employer rule. These four other states are Delaware, Massachusetts, Nebraska and Pennsylvania."

https://weaver.com/blog/living-and-working-new-york-new-jersey-connecticut-impact-convenience-employ...

[qbteachmt]

What matters is the residency. A lot of the articles are for NJ resident, working for out of state business. Also, watch for Dates on the articles, because NJ changed their law and reverted to pre-pandemic conditions.

Try this:

https://schanelcpa.com/i-live-and-work-in-different-states-tax-considerations/

"This means that Florida residents who work at home for out-of-state companies may pay no state income tax at all.

However, if your employer is in New York, New Jersey, Delaware, Pennsylvania or Nebraska, you’ll have to pass a convenience versus necessity test. That means if you work from home as a matter of convenience for yourself, you will likely pay state income tax on all of your income from that employer. If you can demonstrate that there’s a business necessity for you to work remotely, you might only pay state income tax for any time you were actually in the employer’s state. That business necessity might include meeting with clients who live in the state where you live."

[qbteachmt]

Example, this Aug 2021 article:

"Connecticut, Delaware, Nebraska, New Jersey, New York, and Pennsylvania have a “convenience of the employer” rule, which states that if the employer requires the employee to work in another state (i.e., for the employer’s convenience), then withholding is only taken in the location where the work is performed. If, however, the employee chooses to work in another location—i.e., for the employee’s convenience—then withholding must usually be made in both locations. (The employee may escape double taxation via a state income tax credit.)"

Doesn't mention the Oct 2021 change.