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If I live in Wyoming but work 100% remotely for a company in New York City, do I have to have withheld or pay NY state income taxes? Note that Wyoming has no income tax.

When I say 100% remote, I mean never stepping foot in New York State, not even for one day a year. I would meet my colleagues in other states, if necessary, or perhaps at conferences.

I'm unsatisfied with similar questions already asked because they all hinge on being physically present in NY for some non-zero amount of time. The Edward Zelinsky case also hinges on this, as best I can tell.

3

I'm pretty confident that this is consistent across states, you don't have a state income tax obligation from wage income alone unless you physically work/reside in the state.

Specifically from NY's tax website, a company would have to withhold taxes for:

  • New York State residents earning wages even when earned outside of the state
  • New York State nonresidents being paid wages for services performed within the state
  • New York City residents even when services are performed outside New York City

And similarly, a non-resident would have to file a return if:

  • You are a nonresident with New York source income and your New York adjusted gross income Federal amount column (Form IT-203, line 31) exceeds your New York standard deduction.
  • You want to claim a refund of any New York State, New York City, or Yonkers income taxes withheld from your pay.
  • You want to claim any of the refundable or carryover credits available.
  • You had a net operating loss for New York State personal income tax purposes for the tax year, without having a similar net operating loss for federal income tax purposes.

Finally, New York source income is a host of things, but for wages it is limited to services performed in New York State.

If your company erroneously withheld NY income tax, you'd file a NY NR return to get that back, but otherwise your wage income alone creates no NY state filing obligation or tax burden.

The Edward Zelinsky case is more quibbling over percentages for people who already have a non-resident filing requirement because they did physically work in the state some of the time.

  • It seems unlikely, but could "for services performed within the state" cover a situation where someone (from outside the state) is on a remote desktop session to a computer within NYS ... there is perhaps a sense where the actions you carry out, affecting the computer in NYS, could be considered "services performed in the state". Has this interpretation ever been proposed/tested? – TripeHound Jul 26 '18 at 14:54
  • @TripeHound It wouldn't surprise me, but I've always thought it meant physical presence. People talk about 'physical nexus' for state sales tax and I've heard same phrase in this context. – Hart CO Jul 26 '18 at 14:56
  • I wouldn't have thought it would wash, but you never know what someone will try to argue... especially if they can get more tax dollars if it comes off :-) – TripeHound Jul 26 '18 at 14:58
  • This question about similar situation in California has what may be a relevant quote about a "convenience of the employer" test... which at first reading suggests that depending on whose convenience the OP is not physically working in NYS may determine whether they are liable to taxes or not. – TripeHound Jul 27 '18 at 7:09
  • 1
    Update: So far I've not had NYS taxes withheld. My employer has three CPA's on staff, so hopefully they're doing it right. – bendodge Jun 5 at 17:58
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For the longest time, I worked remotely as a W-2 employee for a NYS company, but never set foot in that state. The company (via ADP) only withheld taxes for my state.

I know that can't be a canonical answer, but it's my experience.

  • Maybe not, but it’s a valid confirmation of the one other answer. – JoeTaxpayer Jul 26 '18 at 18:27
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Yes you do pay New York state taxes, even though you live in Wyoming, work remotely and never set foot in New York. This is because New York is one of the few states that has a telecommuters law.

https://www.biglawinvestor.com/new-york-telecommuting-tax-penalty/

If your employer were in California, then you would not need to pay California state tax, as California only taxes work performed physically in the state.

  • Then why didn't my NYS company withhold NYS taxes when I telecommuted for them and for many years never went to NY? – RonJohn May 29 at 2:47
  • @RonJohn Because tax law is complicated, by design occasionally, and your employer may not understand their obligations, if any. – paulj May 29 at 19:41
  • The biglawinvestor.com article cites a court case where the employee in question worked out of New York about 25% of the time. Still haven't found a ruling on the 100% remote employee. – bendodge Jun 5 at 17:57

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