The APA signed a letter in support of section 403 of S. 4318, the American Workers, Families, and Employers Assistance Act, and S. 3995, the Remote and Mobile Worker Relief Act of 2020, prepared by the Council on State Taxation (COST) and the American Institute of Certified Public Accountants (AICPA).
Both bills offer tax filing relief for remote workers during the COVID-19 pandemic that will ease the compliance burden for traveling employees. The proposed legislation also imposes a single, national standard for traveling employees liable for nonresident taxes and their employers that have corresponding withholding and reporting requirements.
S. 4318 was introduced by Sen. Chuck Grassley (R-Iowa), who chairs the Senate Committee on Finance. Section 403 of the bill addresses temporary presence of workers in a state. COVID-19 relief is the focus of the bill, however, section 403 appears broader and would allow a state to only tax nonresident workers who are present and performing employment duties for more than 30 days during the calendar year in which the wages or other remuneration is earned. An employer may use time and attendance records or rely on information provided by an employee to determine if the 30-day threshold has been met.
S. 3995, introduced by Sens. John Thune (R-S.D.) and Sherrod Brown (D-Ohio), was also sent to the Committee on Finance and includes similar provisions regarding temporary presence and taxation. This includes the 30-day threshold. The bill also includes a separate provision providing a 90-day threshold because of COVID-19 orders. APA sent separate letters to the Senate supporting the legislation, but for the provisions on COVID-19 requested a 120-day threshold and that the provision be expanded to apply to all future emergency situations, such as displaced workers because of severe weather conditions.
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Alice P. Jacobsohn, Esq., is Director of Government Relations for the APA.
