Question

If you work remotely for work from home and second home what state do you report income?

Forum|Forum|2 years ago
October 14, 2023
2 replies
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If you work remotely for work and work from home in both your primary home an second home what state do you report the income? Do you report all the income in one state? If you split how do you split? Does it matter where the office is? If you go into the office once a week does that matter?

A

Anonymous_

Employee

Which states?

I believe you mentioned Indiana, Illinois, and Florida in past threads. Obviously, Florida does not levy an income tax, but ~~IL and IN have reciprocity~~.

Where are your homes located?

Hal_Al

Employee

Q. Do you report all the income in one state?

A. Technically, no. But, see a similar question at https://ttlc.intuit.com/community/state-taxes/discussion/re-woking-remotely-for-a-less-than-a-month-in-another-state/01/3099373#M151435

Q. If you split how do you split?

A. You split the income based on the time worked in each state.

Q. Does it matter where the office is?

A. No.

Q. If you go into the office once a week does that matter?

A. No.

I don't think IL and IN are reciprocal.

Reference: https://remote.com/blog/state-tax-reciprocity-agreements

A

Anonymous_

Employee

@Hal_Al wrote:
I don't think IL and IN are reciprocal.

Reference: https://remote.com/blog/state-tax-reciprocity-agreements

Correct; they are not. The states are Kentucky, Michigan, Ohio, Pennsylvania, and Wisconsin.

Indiana, as do most states, will allow a credit for income tax paid to other states, I believe.

T

TomD8

Employee

ALL your income is taxable by your home state, regardless of where you earn it.

Other, non-resident states can tax you on income you earn from work that you actually (physically) perform within that state. There would be an exception if you're a W-2 employee and your home state has a reciprocal agreement with the non-resident state.

The employer's location is irrelevant. The issue is where you physically work. But if you physically go into the office once a week, the income from that work is taxable by the state where the office is located.

If you have to pay income tax to a non-resident state, your home state will ordinarily grant you an "other state credit" for all or part of those taxes. This effectively prevents double taxation.

If you tell us the states involved, we could give you a more specific answer.

Income is allocated to non-resident states according to the percentage of total income earned there.

**Answers are correct to the best of my ability but do not constitute tax or legal advice.