remote work and taxes

Have you hired or transitioned employees to a remote or hybrid work model recently? Here’s how that could affect your business taxes. State Laws and Taxes More than ever before, people are working from home offices. And that means you and your payroll department must be on top of the laws and taxes that not only govern the state your business is based in, but also the states where your employees live and work. If your remote employees are based in the same state as your business, you can use your state’s employment and tax laws for everything. But if you have remote workers who live in other states – or even countries – it is still your responsibility to withhold and file the necessary paycheck percentages and tax files that apply to their state of origin as well. This remote employee and their work may also mean that you have to pay different amounts in income tax and even possibly minimum wage if each state involved has differing policies. For example, if your business is located in Michigan – where the minimum wage is $9.87 an hour – but your employee is working from Illinois, you’ll have to make sure your payroll employees or third-party service accounts for the $12.00 minimum wage in place there. These differences also often exist at the local level as well, and can also affect Social Security and Medicare withholding, too. When it comes to remote employees, the more variables you contend with, the more difficult it will be to accurately calculate and file the applicable taxes per each employee, state, and situation. Remote Work & Taxes: Credits, Incentives According to the Tax Adviser, there are tons of tax incentives and credits that are specifically tied to geographic areas. And when your employees reside outside those areas, you potentially lose out on some of those perks. The evolving remote work environment is creating a lot of buzz around the effectiveness and application of these location-based incentives. It also calls into …

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