4 ms·
Income is taxed where it’s generated in America, not based on residency (at the state level, the feds always get their pound of flesh). Many people don’t follow
by abduhl 4y ago
Income is taxed where it’s generated in America, not based on residency (at the state level, the feds always get their pound of flesh). Many people don’t follow this rule but it’s smoothed over by reciprocal tax agreements between states. Companies are usually good about tracking this stuff and paying taxes appropriately, employees are usually not but the company pays the taxes correctly and so the employee lucks into doing their taxes correctly. Consultants will often find themselves confused after receiving a mean letter the first time they fuck this up because most people think as you do.
- jimmaswell 4y agoEach state has different rules. For one example Illinois doesn't tax remote workers of companies in Illinois who don't live in Illinois.
- bombcar 4y agoDoes any state do that? I'd think it could cause a civil war damn fast. The nexus is "where the work is performed" or "where the employee resides" and usually states have agreements with the neighboring states so it balances out.
- superdude12 4y agoNew York State does this. No civil war so far.
- lesuorac 4y agoDid you miss the part of covid where a bunch of multi-state commuters stopped commuting? https://www.njspotlightnews.org/2022/09/nj-remote-workers-ny-companies-income-tax-murphy-proposal-property-tax-u-s-supreme-court-legislation-legal-battle/ https://www.njspotlightnews.org/2022/09/nj-remote-workers-ny...
- mr337 4y agoYeah, this whole bit is really confusing. Some states have tax agreements as well. I think Illinois and Arkansas has an agreement. Also eyeballing CA as they send us one of those mean letters you speak of. That was "fun" to sort out.
- jeroenhd 4y agoIncome is also taxed if it's generated outside America as long as you're an American citizen. Some people who emigrated to Europe as a child got quite a nasty tax bill for decades of untaxed income when the USA found out that they're still American citizens, for example. Many countries have tax law to deal with this type of American bullshit but it's still something to be aware of.