A COVID-19 relief bill recently introduced in the Senate (S. 4318) would simplify multistate taxation by establishing a 30-day threshold before a state could impose income tax on a nonresident employee’s wages. The threshold would be extended to 90 days during the COVID-19 public health crisis.
Current state requirements vary dramatically, with many requiring employers to withhold income tax even if a nonresident employee performs work in the state during a single day. With many employees working remotely from states that are not their usual work state, the COVID-19 public health crisis has highlighted the complexity of complying with withholding requirements in multiple states.
The provision in the COVID-19 relief bill mirrors language in mobile workforce legislation that has been introduced multiple times during the past 15 years. APA is a member of the Mobile Workforce Coalition that drafted the model legislation and actively advocates for its passage. Current mobile workforce bills under consideration are S. 604, S. 3995, H.R. 4796, and H.R. 5674.
APA’s compliance hot topic on Multi-State Taxation contains information on mobile workforce issues, including links for APA resources and additional education.
Interested in more state and local payroll coverage? APA’s PayState Update eNewsletter is perfect for you.
Mavanee Anderson, Esq., is an Editor of PayState Update and Payroll Information Resources for the APA.
