The new law establishes a 30-day threshold for personal income tax withholding and return filing requirements for out-of-state residents for tax years beginning after December 31, 2020 (the working days do not include any day in which an employee is performing services … **Answers are correct to the best of my ability but do not constitute tax or legal advice. That top marginal rate is one of the highest rates in the country. Oregon has some of the highest tax burdens in the U.S. Depending on your specific tax situation, you may need to file two state tax returns; a resident return and a non-resident return. SHRM Online, June 2020, COVID-19 Is Creating Telework Converts, Get caught up. SHRM Online, May 2020, [Need help with legal questions? Still, it's possible Congress could step in and create a nationwide standard. But it can be a huge headache even when there's not a big impact on your bank account," said Nathan Rigney, lead tax analyst at The Tax Institute at H&R Block. Small Firms Consider HR Role in Fully Remote Environment, Majority of Employers Will Encourage, Not Require, COVID-19 Vaccine: SHRM Research. As a refresher: resident-state: the state where you live. Wynne et ux in 2015 that states cannot legally tax the income of residents earned out of state if they impose a tax on nonresident earnings in the state. "These laws may relate to...wage and hour rules, termination of employment, noncompetition, trade secrets, and sick and family leave rules," Brant noted. Read more at the Oregon Department of Revenue about this topic. "In other words, someone with a New York-based job who lives and telecommutes from another state still owes full income tax to New York on that compensation," Saunders reported. Unfortunately, you will still have to file income taxes in the state where you reside, but the good news is that you usually will get a credit for income taxes paid to other states. New York Gov. Even if employers don't ask where you've been working, states' tax departments have other ways of finding out where you've been, like if you have a mailing address there, Rigney said. For instance, New Jersey and Pennsylvania have a reciprocal personal income tax agreement, which means Garden State residents working in Pennsylvania won't face the Keystone State's income taxes. Additionally, his family continued to live in the Oregon house. In dela Rosa, the taxpayer worked in other states, but owned property in Oregon, kept his Oregon driver’s license, filed joint Oregon tax returns with his wife, and claimed “away-from-home expenses” on his federal tax return for expenses incurred while working out of the state. Some, like Pennsylvania and New Jersey, already have reciprocity agreements because so many people typically commute from one to the other. CNN's Kristina Sgueglia contributed to this report. Out-of-state employers, however, may still have to withhold state income taxes for remote workers residing in these states. }. Some cities and counties in Oregon may assess an income tax on businesses separate from any state taxes. Need help with a specific HR issue like coronavirus or FLSA? In places with many out-of-state commuters (like New York, New Jersey, and Connecticut, as well as cities near state borders), they will have the details on how each state treats out-of-state income. The personal income tax is the main way our state funds the things that matter to Oregonians. In that circumstance, you only pay personal income taxes for the work you do in Or… That's because some states tax income earned there even if the person primarily resides and works in a different state. For purposes of comparison, note that Oregon taxes personal income at marginal rates ranging from 5.0% to 9.9%. 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