Article by Jennifer Karpchuk on “From a Distance: Tax Traps of a Remote Workforce”
In an article published in Tax Notes on July 26, 2021, Philadelphia-based Shareholder Jennifer Karpchuk discusses the state and local tax consequences of remote work.
“To retain talent that has become accustomed to working from home, many employers are offering greater flexibility in where work is performed in a post-COVID-19 world,” explains Karpchuk. “While from a human resources perspective it may be a no-brainer to acquiesce to the employees, for employers that want to maintain a permanent or hybrid remote workforce, there are important tax considerations that should be contemplated.”
Karpchuk further outlines how an employee physically located in a taxing jurisdiction will create the nexus; however, in light of the pandemic some states have waived their general nexus policies for remote workers who were forced to work from home during the pandemic.
“For instance, Pennsylvania’s policy expired June 30,” said Karpchuk. “Once the waiver expires, the remote employee can have important tax consequences for the employer. Therefore, companies need to consider what impact remote employees will have on their tax obligations.”
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