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If an employee works from outside California but is declared by the company as working in CA, from how many days outside CA does it become an issue?

Personal Finance & Money Asked on October 7, 2020

US companies need to know the location of their employees for tax and benefit purposes, while some US and non-US companies manage to allow some of/all their employees to work remotely. Assume that the company is based in California, United States and that one of their employees, Bob, is declared as working from California. If Bob goes outside California and keeps working for the company, from how many days outside California does it become a tax/benefit/etc. issue for the company?

I’m interested in both the case where Bob stays continuously outside for x days and the case where Bob goes back and forth California. I’m also interested in both the case where Bob goes to a different state in the United States and the case where Bob goes outside the United States. I’m not interested what the company’s internal policies can be, but only regulations/laws that apply to the company.

Assume that:

  • the employee is either a US permanent resident or a US citizen;
  • the employee maintains their US federal and California tax residencies;
  • if the employee is a US permanent resident, they follow the USCIS policies to stay a US permanent resident.

One Answer

This article lists that 13 states allow businesses to continue to withhold tax in the state where the employer is located, but it is unclear for other states.

It also lists 13 states where the an employee working remotely in another state does not create nexus and apportionment for the company's tax purposes.

Answered by user102008 on October 7, 2020

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