Working remotely from NH for NY company

[Vcameron01]

Hello,

I live in NH and work 100% fully remote for a NY firm in an accounting role. Should I be having NY income tax withheld? Will I need to file a NY return? I’m unsure if I fall under TSB-M-06(5)I or TSB-M-12(5)I.

thank you,

[shirleyh88]

Hello Vcameron01,

Thank you for your question. I am happy to assist you.

Even though you work from your NH home and do not commute to NY to physically work at the NY office, you are still subject to New York income tax on your wage income. Under the NY “convenience of employer” rule {(based on Section 601(e) of Tax Law TSB-M-06(5)I)}, wages of a non-resident of NY who is employed with a NY-based employer, are considered to be NY source income.

However, there is an exception – if out of necessity, you are obligated to work outside of NY, then your income would not be considered to NY source income.

Your question = Should you have NY income tax withheld?

Answer: TSB-M-12(5)I – per section 671 of the Tax Law, every employer that maintains an office or conducting a business in NY as well as paying wages that are subject to NY personal income tax is obligated to deduct and withhold taxes from those wages.

Your question = Will I need to file a NY return?

Answer: Since your income is considered a NY based source income, yes, you would be required to file a NY state return. But because you do not reside in NY, you would need to file a non-resident return.

Please refer to the following links for references:

https://www.markspaneth.com/insights/industry/industry/remote-workers-may-owe-new-york-income-tax

https://www.tax.ny.gov/pdf/memos/income/m12_5i.pdf

https://www.tax.ny.gov/pdf/memos/income/m06_5i.pdf

Please let me know if this answers your questions, or if I can be of further assistance.

Thank you!

Shirleyh88

[Vcameron01]

@shirleyh88  thank you for your response. “Withholding on wages paid to nonresidents who work 14 days or fewer in New York State (14-Day rule” in TSB-M—12(5)I. Why would this 14-day rule not apply to me when I haven’t physically worked IN the state at all? Who would this 14 day rule apply too?

Why types of things would count as “out of necessity”? Like not having enough room in the NY office? Is there a list somewhere?

[shirleyh88]

Hello Vcameron01,

In response to your question, the “14-day rule” applies to the employer, and not the employee (such as yourself).

I hope this answers your question. Please let me know if I can be of further assistance.

Thank you!

Shirleyh88