![]() ![]() The taxpayer must provide the employer with the appropriate form to notify them of their nonresident status. Pennsylvania has signed reciprocal agreements with Indiana, Maryland, New Jersey, Ohio, Virginia, and West Virginia under which one state will not tax employee compensation, subject to employer withholding of the other state. If telework is optional at the employer’s discretion, then these rules may not apply. Is telework required of an employee? Is this in the employee’s job description? If not, it should be. If the company does not have a policy, one should be created. In addition, PA employers with remote employees should no longer be withholding PA tax on the compensation of employees working from home outside the state.Įmployers should revisit their remote work policies. According to the guidance, PA residents will not be able to claim a resident credit for tax paid to another state on this compensation.Ī non-resident employee who is required to telework full-time from home in another state should treat their compensation as non-Pennsylvania source income even if their employer is located in Pennsylvania. The remote work guidance goes on to provide that a PA resident who is required to telework full-time from home in PA rather than the employer’s location outside of the state should treat their compensation as PA source income. These companies may now have a filing responsibility in PA for corporate income and sales tax. This will directly impact non-PA businesses that have employees working from home in PA. A company which continues to have a Pennsylvania resident working at home after June 30, 2021, may have sales tax nexus for 2021 and future years based solely on the activities of that employee. That includes, in part, engaging in any activity as a business within this commonwealth by any person, either directly or through a subsidiary, representative or an agent. The guidance also provides that a business has nexus with PA for sales tax purposes if it maintains a “place of business” in PA. ![]()
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |