Q: I’ve lived and worked in Florida most of my life and I was recently offered a great opportunity working for a big company located in Boston Massachusetts. Fortunately I won’t have to move, the job can be performed remotely so I can continue to live and work in Florida.
As you’d imagine, living in Florida I’m used to not paying state income tax, and I don’t want to pay state income tax in Massachusetts. How does this work for people who live and work in one state while the employer is in another? Does the company have to be registered in some way in my state?
A: The good news is that because you will continue to both reside and work in Florida you will be taxed the same way you have most of your life. Meaning no state income taxes in FL or MA.
If you think about it, paying taxes according to where you live and work makes sense. If you lived in Massachusetts you’d be reaping the benefits and services provided by the State such as state roads, state highway patrol officers, state parks and universities. We are lucky to live in Florida where there is no state income tax, since Florida can rely on tourism taxes and property taxes for state revenue.
Does your employer need to be registered (or have a presence) in Florida? No, they do not. However, their payroll department will need to figure out what and how much they’re responsible for contributing to the state of Florida. For example they may need to pay into the unemployment insurance fund, or the worker’s comp insurance fund. But, I’m fairly certain that since they’re a large company they have systems in place to take care of those details, so as an employee, you don’t have to.
Lastly, in the event you are asked to work even if only a few days in Massachusetts beware that some states have a “first day” rule, meaning if you work as little as a day in a state you don’t live in you owe that state income tax. Check to see if MA is one of them. Other states have longer kick in periods –from 10 to 60 days- when the nonresident is expected to pay income tax. Consult with HR to ensure that they will take care of all that on your behalf.
Disclaimer: Not intended as tax advice.
©Copyright Eva Del Rio
Eva Del Rio is creator of HR Box™ – tools for small businesses and startups. Send questions to Eva@evadelrio.com
