Homeworkers in the UK should thank their lucky stars they're only taxed on their income once. Nicole Belson Goluboff writing in Legal News TV reports on the latest update on the dreaded 'telecommuter tax'. In a nutshell this means that a Connecticut resident who is an editor with a Manhattan publishing company and works mostly from home would find that under the “convenience of the employer” rule, New York may tax him, not only on the income he earns when he is physically in New York, but also on the income he earns when he works in Connecticut. Because Connecticut can tax him on the income he earns in Connecticut, he may be taxed twice on his Connecticut income. That doesn't strike me as a great incentive to work from home. Goluboff writes: "Under New York’s rule, a nonresident telecommuter may avoid New York tax liability on his out-of-state income if telecommuting is an employer necessity. But New York has almost never considered telework necessary. Until 2006, to prove necessity, a telecommuter had to show that his work, by its nature, was impossible to do in a New York office – say, photographing horses. Since most of the work employees can do from their out-of-state homes is work that can also be done in a New York office, the test was easy to fail."
There's obviously a fight to get this law amended which is outlined clearly in the article.
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