As much as working from home can give a teleworker the ability to better balance their personal and work life \u2014 or give them the opportunity to multitask from home as they attempt to hit their quotas \u2014 the laws that dictate how remote work is regulated can get confusing.<\/p>\n
The Trump administration issued an executive action<\/a> in January to ensure all departments and agencies in the executive branch have their employees report to work in person, making no exceptions for variations of remote work.<\/p>\n In April, Reuters<\/a> reported that the Environmental Protection Agency is now monitoring employees\u2019 card swipes and laptop data to ensure they are working from the office as required.\u00a0<\/p>\n CNBC<\/a> reported that companies like Amazon, AT&T, Boeing, Dell Technologies, JPMorgan Chase, UPS, and The Washington Post have some employees coming into the office five days a week, similar to the executive action.<\/p>\n Yet, people remain committed to the remote work lifestyle. According to a Pew Research<\/a> study from 2024, nearly 46% of respondents said they would be unlikely to stay at a place of work if an employer did not allow working from home.<\/p>\n The benefits and complications of working online<\/p>\n Pew reported<\/a> in 2023 that nearly 35% of U.S. workers who have jobs that can be done remotely are fully working from home, and teleworkers in their survey reported a healthy balance between work and personal life. A majority of hybrid workers also reported continuing to have superiors who trust them to get their work done remotely.<\/p>\n A U.S. Government Accountability Office (GAO) report<\/a> in May listed several benefits for employers that hire remote workers, such as improved recruitment and retention, cost savings, time savings, increased flexibility, and increased productivity.<\/p>\n The GAO also reported<\/a> that telework allows for several groups of people to have better opportunities to work, such as caregivers, parents, workers with disabilities, two-career couples, and older workers.<\/p>\n However, it also listed some complicating factors \u2014 a decrease in workplace culture, the loss of tracking work hours and job performance, and the difficulty in understanding taxation when hiring remote workers.<\/p>\n Complicating income taxes<\/p>\n Another complicating factor for teleworkers is the complicated process to properly pay income tax, as several factors play into how a state taxes an employee.\u00a0<\/p>\n Taxation for teleworkers \u2014 and even the businesses that hire them \u2014 can be confusing due to the differences in state laws, as well as how different states interact with businesses when they hire outside of their locations.\u00a0<\/p>\n For a business, it would not only need to uphold the tax regulations within its own state, but also in each state from which it hires. This can create complications if tax regulations differ from state to state, leading to companies having to register with each tax agency in the locations where they hire workers.\u00a0<\/p>\n Some companies, when they hire workers from out of state, will create a tax nexus <\/a>\u2013 a connection between the company and the state the teleworker lives in to impose taxes on the business itself, as required by the state. This will mean the company will have to file for taxes within that state, as well as the state where they are headquartered.\u00a0\u00a0<\/p>\n Employees can also be hurt by these state laws. As a remote worker, based on where you are employed, you could be dual-state taxed<\/a> \u2014 your income will be taxed by both the state you live in and the state you\u2019re hired in if the states\u2019 legislation overlaps.\u00a0<\/p>\n This could be due to the \u201cconvenience of the employer rule,\u201d which dictates how employees are taxed if they work remotely, depending on whether the employee is required to telework. If an employee is working optionally from home, then the state where the employer is headquartered can impose income taxes on the individual. However, the individual can still be taxed in the state they live in based on how the state handles income taxation in its regulations.\u00a0<\/p>\n At least six states \u2014 Connecticut, Delaware, Nebraska, New Jersey, New York and Pennsylvania \u2014 have legislation that adopts this rule. Connecticut\u2019s law<\/a> is only adopted based on where the remote worker lives, and if it is tied to the other five states.<\/p>\n Some states, like New Jersey, oppose this law and have actually created their own version of the law for states that actively implement it. In 2023, New Jersey<\/a> announced its variation, which dictates that if a teleworker works in any of the states that use the convenience of the employer rule \u2014 while the employer is located in New Jersey \u2014 they will be taxed on their income only by the state of New Jersey, since New Jersey is the source of their income. Connecticut<\/a> enacted similar legislation in 2021.<\/p>\n