Upwork Chief Economist Adam Ozimek discusses where the jobs are in America and how coronavirus will change the future of the workforce.
Remote work has become more commonplace as a result of the coronavirus pandemic, but experts caution against expecting any major changes to U.S. tax laws that would account for these trends.
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According to a June survey from PwC, 55% of employers said they expect most of their employees to work from home even after the pandemic is no longer a threat.
However, as previously reported by FOX Business, there are a number of filing challenges that face remote workers – largely due to a complex patchwork state laws.
For example, there are different rules in every state governing at what point a nonresident is required to pay taxes in the state. In some states taxes kick in automatically, while in others there is a weekslong grace period (i.e., after 14 days in New York).
Whether some people owe more in taxes depends on how high the state taxes are where an individual is currently working vs. their home state. Additionally, there is a situation where workers could face double taxation.
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And while some companies are moving forward with plans to allow workers to telecommute permanently – including Twitter and Facebook – experts say don’t count on any major tax law changes to simplify the filing process in the near future.
“I don’t see it being likely right now for a number of reasons,” Michael Corrente, managing director at CBIZ MHM, told FOX business. “Every state is going to want to make sure they are getting the right tax dollars.”
Corrente added that a sweeping overhaul of tax laws, which have been in place for a long time, would likely be a slow process because no state would want to give up what it is owed.
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Timothy McGrath, managing partner at Riverpoint Wealth Management, said while a standard among all states would be nice – he agreed it is unlikely in the near future for similar reasons.
Ed Slott, founder of IRAHelp.com, added that the government is a “slow-moving bureaucracy,” which often fails to react quickly enough to a changing world.
“The bureaucracy will take forever to catch up,” Slott said.
Many people have been dealing with the complexity of differing state tax laws for years.
McGrath noted that partners at law and accounting firms, for example, may have to file up to 20 separate income tax returns in different states each year – depending on where they worked and traveled.
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Lawmakers have introduced legislation to at least provide temporary relief to some workers from coronavirus-related challenges.
The bipartisan bill stipulates that people who spent thirty days or fewer working in a different state would be taxed as normal in their home state – overriding any conflicting statewide rules. After 30 days, you would be subject to income taxes in the state that you had traveled to.
For frontline workers who crossed state borders in order to help patients in hard-hit states, like New York, the moratorium on income taxes in the new state would be extended to 90 days.
It is unclear whether this legislation will pass.
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September 12, 2020 at 01:58AM
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Will tax laws change as remote work becomes more popular? - Fox Business
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