Convenience Rule

Technical topics regarding tax preparation.
#1
MTS  
Posts:
280
Joined:
6-Dec-2017 12:49pm
Location:
Kansas
Taxpayer moved from NE to MO and recently received a letter from their NE employer noting that they are subject to the convenience rule and owe NE taxes and will be liable for double withholding for MO as well. It looks like there are a handful of states that follow this convenience of employer rule and require taxes to be paid to their state if your working remotely for your convenience (and not the employers). It sounds like some states will still allow a credit for the taxes paid to the other state, so your only liable for the difference, if your resident state happens to have higher taxes/tax rates. I know in general MO allows credit for tax paid to other states, but I'm not sure whether MO falls in that category and will allow a credit for taxes paid to a state employing the convenience rule. Anyone encountered this and is there any source that shows which states might still allow the credit for tax paid to other states in this scenario? Trying to avoid a double taxation scenario at the state level here.
 

Return to Taxation



Who is online

Users browsing this forum: Google [Bot], JAD, Jeff-Ohio, Nilodop, Permanently-Diff, ssmiley10 and 129 guests