![]() Depending on her filing status and how much money Sarah earned while working remotely in Alabama, she may need to file and pay Alabama income tax as a part-year resident of that state. She stays in Alabama for four months, working remotely while she’s there.Īlabama does impose state income tax, even for part-year residents. Since she doesn’t have family in Texas, she decides to stay with relatives in Alabama, departing just before the lockdown starts. During the pandemic, she’s assigned to work remotely. Sarah ordinarily lives and works in Texas, a state that does not have a state income tax. Taxes and Remote Work in a Different State: A Scenario Some cities, counties, and municipalities have income tax requirements above and beyond state requirements that you’ll need to consider. In other states, specifics vary greatly about the circumstances under which part-year residents or nonresidents are required to file or pay state taxes. ![]() Several states have reciprocity agreements with each other, which may limit taxation to the state in which one lives rather than the state where one works. There are nine states that don’t have a state income tax on earned wages: Alaska, Florida, New Hampshire, Tennessee, Texas, South Dakota, Washington, Wyoming, and Nevada. ![]() There isn’t a simple, one-size-fits-all answer to how to file taxes if you worked remotely in a different state, because so many variables impact taxation: What does this mean for remote workers? If you worked remotely in a different state, you may need to file and pay state income taxes in that location. What some people don’t realize is that income tax requirements vary significantly by state. If you worked remotely in a different state, you may need to file and pay state income taxes in that location.
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