Tax Guru – Ker$tetter Letter

N.Y. telecommuter tax under fire. Lawmakers’ bill would block double taxation of workers – Thanks to Ben Cunningham for this story of the screw-job the Empire State is doing on people who live in other states, but work for companies that are located in New York.  This is the kind of crap the rulers in the PRC like to pull, levying unfair taxes on people who can’t vote in that state or do anything else to punish the elected aristocracy.  Unfortunately, the only recourse does seem to be a Federal law banning this because the state government has a vested interest in maintaining this source of unfair revenue.

Some people may feel it’s no big deal to have New York levy income tax on nonresidents because of the credit that is available on most state tax returns for taxes paid to other states.  As someone who prepares a high percentage of multi-state income tax returns, I can attest to the fact that such credits do not balance things out properly.  For people who do live in taxable states, the net effect is that they pay the higher state tax on their income, which would normally be New York’s for the people discussed in this article.  For people who live and work in states without income taxes, they are completely screwed because there is no way to recover the tax paid to New York.