The Mobile Workforce State Income Tax Simplification Act of 2019 has been introduced in the 116th U.S. Congress (2019-2020). If enacted, S. 604 would simplify multi-state taxation by establishing a 30-day threshold before a state could impose income tax on a nonresident employee’s wages.
The mobile workforce bill provides a 30-day safe harbor for employees and employers. When an employee travels into another state for work, he or she will not be subject to nonresident taxes for time periods of less than 30 days. The 30-day threshold is not continuous, so an employee might make a number of business trips to a state before reaching it. Once the threshold is reached, the tax and withholding obligation goes back to the first day worked in the state.
APA continues to support the legislation, which has been introduced a number of times since 2006. In 2017, the U.S. House of Representatives passed the legislation, but the congressional session ended before it was put to a vote by the Senate.
Need help with multi-state tax compliance? Check out APA’s Payroll Issues for Multi-State Employers webinar series, available on demand!