Remote work opened up a whole world of possibilities.
Especially for the people living in states with a higher cost of living.
They can now move to much more affordable areas.
And keep their well-paying jobs.
Good for the employees.
And good for the companies.
All these advantages come with a few challenges as well.
One of the major one being taxes.
As a company, when one of your employee is working remotely from another state, then the tax authority of that state can impose taxes on your business.
Because your remote employee can establish nexus (connection) between your business and your employee’s home state.
And this triggers tax obligations for your business.
Keep informed — know the tax requirements.
In situations like these the rules require that the connection must be “substantial” before nexus applies.
Yes, remote work can create some tax complexity.
But, overall, it’s a win/win — for the company and its employees.
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