Telecommuters and Taxes
Tax & AccountingMarch 09, 2021

2021 State Income Tax Nexus for Telecommuters

By: Tim Bjur, JD

This chart shows  if  employees telecommuting or working from a home office  creates state income tax nexus for their employers.

 

JURISDICTION TELECOMMUTER OR WORK-FROM-HOME OFFICE
 COMMENT
Alabama  Creates nexus.

Activity included in state nexus questionnaire.

Coronavirus (COVID-19) Pandemic
Employees telecommuting during the health emergency does not create nexus, alter the apportionment formula, or require additional withholding.
 Alaska  Creates nexus.  
Arizona Creates nexus. Activity included in state questionnaire.
Arkansas Creates nexus. Activity included in state nexus questionnaire.
California Creates nexus.

Activity included in state questionnaire.

Coronavirus (COVID-19) Pandemic
Employees telecommuting during the health emergency does not create nexus.
Colorado Creates nexus effective April 30, 2010, if any factor thresholds are exceeded.  
Connecticut May create nexus, if receipts from business activities attributable to state sources exceed threshold amount.  
Delaware Creates nexus.  
District of Columbia Creates nexus. Activity included in state nexus questionnaire.

Coronavirus (COVID-19) Pandemic
Employees telecommuting during the health emergency does not create nexus.
Florida Creates nexus.
Georgia Creates nexus.

Coronavirus (COVID-19) Pandemic
Employees telecommuting during the health emergency does not create nexus or require additional withholding.
Hawaii Creates nexus.  
Idaho Creates nexus.  
Illinois Creates nexus.  
Indiana Creates nexus.

Coronavirus (COVID-19) Pandemic
Employees telecommuting during the health emergency does not create nexus or require additional withholding..
Iowa Creates nexus.

Coronavirus (COVID-19) Pandemic
Employees telecommuting during the health emergency does not create nexus. Withholding requirements have not been modified by the COVID-19 pandemic, withholding may need to be adjusted.
Kansas Creates nexus.
Kentucky Creates nexus.

Activity included in state nexus questionnaire.

Louisiana Creates nexus.  
Maine Creates nexus. Activity included in state nexus questionnaire.

Coronavirus (COVID-19) Pandemic
Employees telecommuting during the health emergency does not create nexus or require additional withholding.
Maryland May create nexus.

Activity included in state nexus questionnaire.

Coronavirus (COVID-19) Pandemic

Employees telecommuting during the health emergency does not create nexus or alter the apportionment formula. Special withholding rules apply.
Massachusetts Creates nexus.

Coronavirus (COVID-19) Pandemic
Employees telecommuting during the health emergency does not create nexus, alter the apportionment formula, or require additional withholding from out-of-state employers for residents working from home in the state.

Employers in the state must continue to withhold for nonresident employees:

  • who worked in the state before the COVID-19 emergency; and 
  • who are performing that work at their home in another state during the emergency
Michigan

Creates nexus, if:

  • taxpayer or taxpayer's representative has physical presence in the state for 1 or more days; or
  • sales activities exceed gross receipts threshold
 Activity included in state questionnaire.
Minnesota Creates nexus.

Activity included in state nexus questionnaire.

Coronavirus (COVID-19) Pandemic
Employees telecommuting during the health emergency does not create nexus or require additional withholding.
Mississippi Creates nexus.

Coronavirus (COVID-19) Pandemic

Employees telecommuting during the health emergency does not create nexus, alter the apportionment formula, or require additional withholding.
Missouri Creates nexus. Activity included in state nexus questionnaire.
Montana Creates nexus.  
Nebraska Creates nexus.  
New Hampshire Creates nexus.  
New Jersey Creates nexus.

Activity included in state nexus questionnaire.

Coronavirus (COVID-19) Pandemic
Employees telecommuting during the health emergency does not create nexus.
New Mexico Creates nexus. See In re Dart Industries, Inc. (foreign manufacturer and marketer of Tupperware products that entered into franchise agreement with New Mexico distributor was subject to corporate income tax because it engaged in extensive in-state activities that exceeded the solicitation of orders protected by P.L. 86-272, including distributor's maintenance of an in-state office).

Activity included in state nexus questionnaire.
New York Creates nexus.

Coronavirus (COVID-19) Pandemic 
For a nonresident whose primary office is in New York, days telecommuting during the pandemic are considered days worked in New York, unless the employer has established a bona fide employer office at the employee’s telecommuting location.
North Carolina Creates nexus.  
North Dakota Creates nexus.

Coronavirus (COVID-19) Pandemic

Employees telecommuting during the health emergency do not create nexus or alter the apportionment formula payroll factor.
Ohio Creates nexus for CAT purposes, if any factor thresholds are exceeded. Factor presence thresholds are covered in chart under Threshold Standards > Factor-Based Nexus.
Oklahoma Creates nexus.  
 Oregon Creates nexus.

Activity included in state nexus questionnaire.

Coronavirus (COVID-19 Pandemic
Employees telecommuting during the health emergency does not create nexus.
Pennsylvania Creates nexus.

Activity included in state nexus questionnaire.

Coronavirus (COVID-19) Pandemic
Employees telecommuting during the health emergency does not create nexus or alter the apportionment formula.
Rhode Island Creates nexus. Coronavirus (COVID-19) Pandemic
Employees telecommuting during the health emergency does not create nexus, alter the apportionment formula, or require additional withholding.
South Carolina May create nexus.

Coronavirus (COVID-19) Pandemic
Employees telecommuting during the health emergency do not create nexus or alter the apportionment formula. Special withholding rules apply.
Tennessee Does not create nexus.  
Texas Creates nexus.  
Utah Creates nexus. Activity included in state nexus questionnaire.
Vermont Creates nexus. Coronavirus (COVID-19) Pandemic 
For businesses having remote workers located in Vermont only on a temporary basis, Vermont will not require the business to change the employee's withholding state.
Virginia Creates nexus, if any apportionment factor is positive.

 
West Virginia May create nexus. Activity included in state nexus questionnaire.
Wisconsin May create nexus.

Coronavirus (COVID-19) Pandemic 
Employees telecommuting during the health emergency do not create nexus.
Source: Wolters Kluwer CCH® AnswerConnect, 2021
Permission for use granted.
Tim Bjur, PD
Tim Bjur, JD
Senior Content Management Analyst
Tim Bjur is an attorney and senior content management analyst for Wolters Kluwer Tax & Accounting, who has spent the last 18 years analyzing state income tax legislation, case law, and regulatory developments. He offers a detailed understanding of state personal and corporate income taxation and trends across all states and has been quoted in top media publications, including Forbes and CNBC.
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