Tax Question - reside in D.C. and work remote for a company based in NY

Submitted by boopthesnoot19387 t3_10lsg58 in washingtondc

Hi guys. I'm looking for anyone in this exact situation due to the peculiar laws.

I'm employed by a firm based in New York state (not NYC) and work remote from my home here in d.c. full time. I'm trying to figure out what this means as it relates to my taxes.

NY seems to have this strange "convenience rule" that suggests I owe taxes to NY. Is this accurate? If so, what does this mean as far as D.C. taxes? There's no way I have to pay 2 states worth of income taxes right?

If anyone in my situation could elaborate a bit on how all of this works I'd be super grateful. I've done 100 google searches for and I'm more confused now than when I started searching for answers.

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Aggie_Hawk t1_j5ynsw3 wrote

No, you won’t pay twice. If NY taxes were taken out you will need to file a return for both NY and DC, you will file as a nonresident in NY and a resident in DC. This is pretty common and you will just be refunded from NY and may owe to DC

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boopthesnoot19387 OP t1_j5yobwd wrote

Appreciate the reply. D.C. taxes were withheld from paychecks. Does this change your answer at all?

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the_eso t1_j5yq4y3 wrote

If you didn't pay anything to NY, I wouldn't worry about it. I work remotely for a company in NY too, and they only withheld DC 'state' taxes for me. I'm not going to file anything for NY.

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Aggie_Hawk t1_j5zxq96 wrote

Yep, this is correct. If you didn’t pay NY taxes then there’s nothing to do

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Adeelinator t1_j5z2dfx wrote

Same - been doing that for years. Everyone I know that lives in DC for an NY-based company also does the same.

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the_eso t1_j6065bh wrote

As blasé as my previous post was, now I've gone down the rabbithole on NY taxes. I'm still not going to particularly worry about it, and I think my company meets the criteria for me to not have to pay this tax, but man NY's income tax law is aggressive. Given the normal dysfunction between MD, DC and VA, at least we've settled on who gets what income taxes in a sane way.

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boopthesnoot19387 OP t1_j61q3el wrote

Right? I happened to stumble across an article about taxes and the more I found out about NY the more I got worked up.

Our family tax preparer seems to think we pay NY and then get that amount as a credit on DC. Appreciate all of the input everyone. I'll update when it's all said and done if I remember.

God bless our super simple tax system.

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new_account_5009 t1_j61svi7 wrote

Back when I was in consulting a few years ago, I lived in Virginia, but was frequently on client site working in NYC living out of a hotel during the week. I was required to file taxes with NY state for the portion of time spent in the city. I don't recall the specifics, but it was a bit of a pain in the ass.

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NomDePlume007 t1_j5yo6hf wrote

It's your taxes on the line. My best recommendation is to have a professional prepare your taxes. Almost anyone in the DC area will be familiar with multi-state returns. I work as a contractor and/or employee for clients in multiple states, so I pay $200 a year to have our taxes done, it's worth the peace of mind.

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boopthesnoot19387 OP t1_j5yooo7 wrote

Not a bad suggestion. We have a CPA in our family that typically handles our taxes, but I don't think they are super familiar with my exact situation. Might be worth going with someone who handles this type of thing on a regular basis

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Loki-Don t1_j5yyc7j wrote

The NYC convenience rule is a thing and holy shit do they enforce it. The state was losing billions a year in early Covid because all the New Yorkers went elsewhere while keeping their NYC based jobs.

You won’t pay twice, but NY will get their piece, and it ain’t small.

Also, be 100% sure that you alcan forever work remote 100% of the time. I once made that mistake (lived in DC and worked for a firm with its office in NYC) and after 6 months it was “hey, can you just come up one day a week” and escalated from there to 3 or 4 days a week and that commute sucks. I finally found another job after a year of that bullshit because it was stressing me out.

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BubsterX1 t1_j637t3i wrote

OP says in the original, unedited post that his employer is in NY but not NYC. So a discussion of NYC's tax program is not helpful.

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