As defined by the U.S. Internal Revenue Service (IRS), “convenience of employer” generally means that an employer has not provided an employee with the necessary resources for an employee to work remotely, such as a physical office or technology, which requires the worker to provide for their own home office equipment.
What does for the convenience of the employer mean?
For the convenience of the employer means you have a substantial business reason for providing the meals and lodging other than to provide additional compensation to the employee.
Which states have convenience of employer rules?
The seven states which have so-called convenience of employer rules, including the temporary Massachusetts’ measure, are New York, Arkansas, Connecticut, Delaware, Nebraska and Pennsylvania. Connecticut has a rule in place that is similar, though not exactly the same, and designed to only target New York.
What is the convenience rule?
The convenience rule expands that standard rule to say that in-state workdays include not only the days on which the person was physically present in the state, but also days worked out of state unless those workdays were for the necessity of the employer and not for the convenience of the employee.
Do you have to tax telecommuters in Maryland?
Maryland does not tax telecommuters who are working remotely from outside of Maryland. Had the situation been reversed (living in MD, telecommuting to NY), you would have needed a nonresident return for New York. New York does tax the telecommuter working from outside the state on the convenience of the employer principle.
What are the different types of telecommuters in the workplace?
Some telecommuters are long-distance, living hundreds or thousands of miles from the employer, maybe off in another region of the country. And then there is the internationaltelecommuter, someone working from a home overseas, in a country other than that of the employer.
Can a telecommuter be taxed in New York State?
As I provided in my original answer, only 5 states have been using the “convenience of the employer” principle to tax a telecommuter working for a company within the state, although the telecommuter lives outside of the state: New York, New Jersey, Pennsylvania, Delaware, and Nebraska. Maryland has not done so up until this point.
How is the income of a telecommuter divided?
A minority of states use the convenience of the employer test, under which in almost all cases a telecommuter’s income is apportioned entirely to the state in which the taxpayer’s employer is located.
