Today’s changing work environment that consists of increasing telecommuting and employees traveling to a client’s on-site location is presenting new challenges for businesses and workers alike when it comes to taxes. One area that is particularly vexing, not to mention potentially costly, for employers and employees is the area of non-resident income taxes.
When it comes to non-resident income taxes, the problem is a combination of complex administration of tax withholdings for multiple states and ignorance about the fact that employees may, in fact, owe income tax in states in which they do not live.
Temporary Out of State Workers

One example would be businesses that operate in Florida and have employees who typically operate to another state for business, we’ll say New York. But, for approximately 30 days each year, an employee travels to New York to conduct business. In some situations, the employer is required to withhold taxes for New York for the days in which the employee worked.
Here’s where it gets tricky. The employee would then need to file a non-resident tax return for the state of New York, where the employee spent 30 days of the previous year working and possibly, even be subject to New York City tax too.
Compliance with withholding laws for non-resident employees is complex and difficult to manage, but it is necessary. Failure to do so, is simply too costly for most small businesses to consider. Businesses that utilize telecommuters or traveling employers are encouraged to consult with us.