State and Local Income Tax and Employment Law Implications for Remote Workers During COVID-19

COVID-19 has drastically changed how and where employees work, with many now working from their homes or other remote locations. These temporary (and sometimes longer-term) teleworking arrangements raise questions about how state and local income tax and employment laws should apply to employees who live and work in different jurisdictions.

For example, think of many large metropolitan areas — Washington, D.C.based employers may have employees residing in Maryland or Virginia, and New York City based employers may have employees residing in New Jersey, Connecticut or Pennsylvania. It also may be that although one state may be the situs for the employer’s operations and the employee’s residence, they may be in different local jurisdictions — e.g., employers with operations in Los Angeles may have employees resident in California but outside the city or county limits. And an employer faces similar issues if an employee has temporarily relocated to another state that is neither the state in which the employer’s operations are located nor the employee’s resident state (for instance, to shelter with family).

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