Working remotely tax impact Forum

[Anonymous User]

I know a lot of us Biglaw associate’s have been working in different low/no income tax states like Florida and Texas as opposed to our normal offices in New York and California.

For those of us who have been residing in these jurisdictions for more than 6 months of 2020 now while working, doesn’t that mean that we don’t have to pay New York City or state income taxes? There are obviously tends of thousands of dollars at stake here in taxes, so it’s a big question.

Assuming the answer is yes, how should we get it remedied with our firms that have been withholding state and city income taxes all of these months? Thanks!

[PT818]

Sorry, it doesn't work that way. You will still owe NY tax for the whole year, for two reasons: (1) you haven't established non-NY domicile (since you do not have an intent to remain in the second jurisdiction permanently) and (2) NY taxes remote workers who work for NY offices if they are working out of state out of "convenience," which you are. Also, the fact that your employer has been treating you like a NY taxpayer for the past six months would be a huge red flag if you tried to avoid paying NY tax. There's no way for you to get the law firm to try to change your past withholding.

[Anonymous User]

Sorry, it doesn't work that way. You will still owe NY tax for the whole year, for two reasons: (1) you haven't established non-NY domicile (since you do not have an intent to remain in the second jurisdiction permanently) and (2) NY taxes remote workers who work for NY offices if they are working out of state out of "convenience," which you are. Also, the fact that your employer has been treating you like a NY taxpayer for the past six months would be a huge red flag if you tried to avoid paying NY tax. There's no way for you to get the law firm to try to change your past withholding.

I’m pretty sure you establish domicile when you reside somewhere with an intent to remain “indefinitely” not “permanently”. Otherwise, people Working in New York with plans to retire to Florida wouldn’t be New York residents for 40 years, as one silly example of that rule

[PT818]

I'm using the language that the NY tax code uses: https://govt.westlaw.com/nycrr/Document ... c.Default)

You have a very literal understanding of the word "permanently". But yes, someone who plans to retire in Florida in 30 years will still count as a NY domiciliary. Someone who's living in Florida for the duration of a pandemic will count as a NY domiciliary as well.

This is an open-and-shut case.

[Anonymous User]

I'm using the language that the NY tax code uses: https://govt.westlaw.com/nycrr/Document ... c.Default)

You have a very literal understanding of the word "permanently". But yes, someone who plans to retire in Florida in 30 years will still count as a NY domiciliary. Someone who's living in Florida for the duration of a pandemic will count as a NY domiciliary as well.

This is an open-and-shut case.

I’m not so sure it is. I worked for a partner at my old firm who had nice homes in both Texas and New York and split his time almost exactly half in half between the two each year for work purposes. He always used to tell me that he would keep track of his New York days to make sure they didn’t reach 180 in a calendar year so that he could pay Texas income taxes (I.e. none) and not for New York. How is an associate living in Texas this year any different? We are residing there while working for more than half the year and so shouldn’t pay New York income taxes

[PT818]

I'm super sure it is. Part of my job is helping people with NY tax residency audits. Associates like you will owe NY City and State income tax for all of 2020.

First of all, you are in a totally different situation. You don't have an office in Texas/Florida; you're just working remotely for a NY firm. And you're not settling down in Texas/Florida, you're just there until your NY office reopens. Second, your employer has been treating you as a NY resident all year. There's no way to fix that; no NY law firm will help its associates evade taxes, and NY already has a record of you being a NY resident through September.

Edited to remove speculated about partner's taxation. I would need more info to say for sure.

[Sackboy]

I’m not so sure it is. I worked for a partner at my old firm who had nice homes in both Texas and New York and split his time almost exactly half in half between the two each year for work purposes. He always used to tell me that he would keep track of his New York days to make sure they didn’t reach 180 in a calendar year so that he could pay Texas income taxes (I.e. none) and not for New York. How is an associate living in Texas this year any different? We are residing there while working for more than half the year and so shouldn’t pay New York income taxes

One is an employee who is told what office employs him or her and therefore where he or she works from.

The other is an equity partner (aka owner) of a business and likely picked to indefinitely reside in TX with no complaint from the other partners while doing a fair amount of work in the NY office.

If you want to pay TX taxes as an associate, get hired at a biglaw firm in TX.

This thread is about as inane and has about as much merit as the tangent about suing biglaw firms for reneging on offers.

[Anonymous User]

With only a few people left on this forum that are as bitter as you, it’s no wonder that this forum is mostly dead outside of bonus talk.

Anyways, I do concede that it was dumb of me to ask this question to a bunch of randoms on the Internet. I’ll consult my tax advisor instead. Thanks all (for nothing)

[Anonymous User]

I’m not so sure it is. I worked for a partner at my old firm who had nice homes in both Texas and New York and split his time almost exactly half in half between the two each year for work purposes. He always used to tell me that he would keep track of his New York days to make sure they didn’t reach 180 in a calendar year so that he could pay Texas income taxes (I.e. none) and not for New York. How is an associate living in Texas this year any different? We are residing there while working for more than half the year and so shouldn’t pay New York income taxes

One is an employee who is told what office employs him or her and therefore where he or she works from.

The other is an equity partner (aka owner) of a business and likely picked to indefinitely reside in TX with no complaint from the other partners while doing a fair amount of work in the NY office.

If you want to pay TX taxes as an associate, get hired at a biglaw firm in TX.

This thread is about as inane and has about as much merit as the tangent about suing biglaw firms for reneging on offers.

I meant to quote you for my prior post

[Anonymous User]

Anyways, I do concede that it was dumb of me to ask this question to a bunch of randoms on the Internet. I’ll consult my tax advisor instead. Thanks all (for nothing)

Good luck with the tax evasion.

[Anonymous User]

I’d talk to your firm about this (as well as your tax advisor). You saying that you are a resident of a state for your personal taxes may have an impact on your employer’s tax reporting.