Notifying employer of move to full-time RV live

[Kirk W]

38 minutes ago, Blues said:

  His job was going all over the country to check on bottlers and retailer accounts (like grocery store chains), usually traveling Monday-Thursday, and working in his home office, in Texas, on Fridays. 

I was in a somewhat similar situation in my career. I started work with a Fortune 500 company in CO and paid CO income tax for 3 years when I was moved to Cheyenne, WY where there is no state income tax with my boss & office in Denver. For the next 18 years I traveled from Cheyenne to accounts in Nebraska every week, usually spending 1 or 2 nights there and also traveled to the west inside of WY for a couple of days with occasional day trips back into CO. While I don't believe that my hours worked in each state were tracked, I am sure that at least 40%+ of my work was in NE and probably another 5% in CO. None the less my employer never withheld any taxes for NE or CO once I moved to WY and I never filed taxes in them. My last 11 years were spent living in TX and while I then was not out of state nearly so much, I suspect that 10% of my work was outside of TX. At the time I never gave it much thought as I just assumed that what my employer did was proper and legal and I still believe that.  Of course since I have now been retired for longer than the statute of limitations, I guess I really don't care. But it does pose some interesting thoughts.

I currently know a person who is fulltime RVing and is an employee of a contractor for the US Army doing software development. He works via the internet for the Army Recruiting Command on that contract and yet rarely passes nearby and he spends most of his time in TX, CA, and IN as those are the places his grown children live. His domicile is TX and his banking, insurance business, vehicle registrations & insurance are all in TX as are his doctor & dentist. He actually performs his work from the RV in whatever location they happen to be on any given workday. I know that the contractor he works for and the Army both know what he is doing. He told me that his payroll is treated as if he is a remotely working employee, resident of TX. 

Might there be an agreement among the states to just tax according to where you live?

[Dutch_12078]

1 hour ago, dlundby said:

Dutch I agree. What happens with the over the road truck driver who travels 48 States and Canada? They pay their respective payroll taxes in their home/domicile State.

Exactly... My home/domicile was in upstate New York and the corporate office I was dispatched out of was in Massachusetts. All I ever paid was federal and NY income taxes.

[lappir]

Tax laws are at the interpretation of the person reading and filling out the information to prepare the tax return.  They are only verified when a person is subjected to an Audit. Then it's who argues the best on what was written in the instructions. 

 

I was audited several years ago and wish I would have paid what the letter said. Instead I argued for 2+years, had several representatives and then paid the "Tax Lawyer" to decrease my bill to the government but their bill brought it back over what the initial payment would have been. 

A similar situation occurred last year when I had my taxes filed. I get a letter saying I didn't report the "Subsidy" amount I received from the "Trump" administration. I told my tax preparer I did not receive a check or direct deposit. How do I fight it. She said I should just ignore since I would have to pay her more than the subsidy payment to prove I didn't get it.  Something certainly wrong with the Taxing in America. But we all know that. It's only going to get worse. 

Rod 

[podwerkz]

On 2/9/2022 at 1:35 AM, Payroll Person said:

If you will be truly mobile, you will be the payroll department’s worst nightmare.

For the truly mobile employee and their employer, the myriad of tax jurisdictions mean it will never be simple. Look at what pro athletes have to deal with for an example (and why many refuse to play for a CA or NY team when they have an option for a no state tax state for their home events).

Domicile has nothing to do with the employer’s worry, they, and you, have to deal with the taxes at each location you work from. Your domicile may also want a bite from you  

 

I'm sure glad this accounting mess doesn't apply to truck drivers. It would be impossible to figure out a truck driver's yearly federal and state taxes if he or she had to figure how much work they did and how much they got paid in each and every state they pass thru and pickup and deliver cargo in and out of.  Same thing applies to railroad, bus, and airliner crews.

This devisive tax mess needs to be streamlined for other employees also.

 

 

 

 

Edited February 21, 2022 by podwerkz

[Payroll Person]

There are usually carve outs, exceptions. It is just a situation of having each state having their own rules, and whether or not there is a federal rule which creates the exception.

Truckers have many exceptions when federally regulated, but states can still get in the way. Overall length is one, such as how CA has a special length rule for race car rigs, such as going to Fontana or Sears Point.

As much as payroll people want common rules, it will never happen as each state tries to make a living. If anything, states are looking at NY and CA to see how than get more income subject to their taxes. 

[podwerkz]

Yep, always exceptions to the rules. Truck length laws are way off topic so I wont follow that rabbit into it's rabbit hole...not this time anyway!

But mainly, my point is that gig and remote workers should have a simple procedure to determine their 'tax home' just like transportation workers do.

 

 

 

 

 

 

[Kirk W]

Have any of you considered talking with one of the many X-scapers who are traveling and working as they go? That might be a good place to start. I wonder if we are speculating about a complex problem that at so far, has not happened. 

Edited February 21, 2022 by Kirk W

[Payroll Person]

A payroll expert is the best source of advice. One who has experience with multi state issues. Even better, with remote worker experience. 

I say this as many will be using the only in my domicile state until caught method, and getting caught is rare unless certain aggressive states are involved. 

[Kirk W]

1 hour ago, Payroll Person said:

Even better, with remote worker experience. 

Exactly!  

[Blues]

4 hours ago, podwerkz said:

I'm sure glad this accounting mess doesn't apply to truck drivers.

For the record, it doesn't apply to truckers because of a federal law that provides that their compensation is taxed in their state of residence; before the 1990 amendment that provides this, it was possible for a trucker to owe income tax in a state other than his state of residence.

https://docs.uscode.justia.com/1994/title49/USCODE-1994-title49/pdf/USCODE-1994-title49-subtitleIV-chap115-sec11504.pdf

 

3 hours ago, Payroll Person said:

A payroll expert is the best source of advice. One who has experience with multi state issues.

I say this as many will be using the only in my domicile state until caught method, and getting caught is rare unless certain aggressive states are involved.

What do you think led Kirk's company, and the national soft drink company my friend worked for, to base withholding solely on Kirk's and my friend's state of residence, even though they regularly performed work outside the state, in states that have income taxes?  Is it possible these two major companies/employers really didn't understand the law?  Or they did, and were just hoping not to get caught?

[Kirk W]

1 hour ago, Blues said:

Is it possible these two major companies/employers really didn't understand the law? 

I kind of think that 3M company has enough financial and legal experts to have some idea of what is legal. 

[Dutch_12078]

47 minutes ago, Kirk W said:

I kind of think that 3M company has enough financial and legal experts to have some idea of what is legal. 

Yes, and the company I worked for at the time used the largest payroll processing company in the US, ADP, for payroll processing. I expect they too had a pretty good idea of what's legal.

[docj]

On 2/20/2022 at 8:41 AM, lappir said:

A similar situation occurred last year when I had my taxes filed. I get a letter saying I didn't report the "Subsidy" amount I received from the "Trump" administration. I told my tax preparer I did not receive a check or direct deposit. How do I fight it. She said I should just ignore since I would have to pay her more than the subsidy payment to prove I didn't get it. 

With all due respect there must have been a misunderstanding.  None of the stimulus checks mailed out during the Trump administration were considered taxable income.

https://www.cnbc.com/select/will-stimulus-check-be-taxed/

[lappir]

7 hours ago, docj said:

With all due respect there must have been a misunderstanding.  None of the stimulus checks mailed out during the Trump administration were considered taxable income.

https://www.cnbc.com/select/will-stimulus-check-be-taxed/

I will agree it was a misunderstanding. I don't understand where the money went. 

[Blues]

21 hours ago, Kirk W said:

I kind of think that 3M company has enough financial and legal experts to have some idea of what is legal. 

Me, too.  And it seems like it would work for nomadic employees, too, but Payroll Person and the New York Times article referenced above are saying otherwise.  In fact, the article is titled, "These Laws Make Scofflaws of Us All." 

So actually, it appears that what 3M was doing was not in compliance with the law, depending on which state its employees were working in.  It also appears that those states weren't enforcing their laws, probably because they wouldn't derive enough revenue to warrant the cost.  But that doesn't mean 3M was in compliance with the laws.

An example in the article is New York sending state employees to the Javits Center (during conventions, I assume), to see which companies are sending employees there.  That's pretty aggressive, especially because New York requires a person to be in the state for 14 days before having to report income earned while there, so if an employee goes to one trade show for a week, that still wouldn't make him subject to New York income tax. 

But it does show that in New York, at least, physical presence while performing work does subject a person to New York's income tax, and the only question is whether the person meets the 14-day threshold.  This means that regular people aren't treated like truckers or railroad employees, who pay income tax only in their state of residence, regardless of where they perform the work. 

 

20 hours ago, docj said:

None of the stimulus checks mailed out during the Trump administration were considered taxable income.

But lappir said "subsidy," not stimulus, and he said he got a letter about it after filing his return.  I don't think there would be any letter concerning any stimulus because stimulus payments weren't even mentioned on income tax returns.

Subsidies are most prominent in Obamacare, and they do get reported on income tax returns.  And a person receiving a subsidy wouldn't receive a check or direct deposit, but instead would have a reduced health insurance premium, and it all gets sorted out on the income tax return. 

But if it was a subsidy, as lappir reported, then surely his tax preparer wouldn't tell him to just blow it off.  They're not only reported, they get their own schedule on the 1040, for reconciliation.

[docj]

1 hour ago, Blues said:

Subsidies are most prominent in Obamacare, and they do get reported on income tax returns.  And a person receiving a subsidy wouldn't receive a check or direct deposit, but instead would have a reduced health insurance premium, and it all gets sorted out on the income tax return. 

Sorry, but Obamacare subsidies are not taxable:

Q. If I get an Obamacare subsidy in the exchange, is the subsidy amount considered income?

A.  No. The subsidies (both premium assistance tax credits and cost-sharing) are not considered income and are not taxed.

https://www.healthinsurance.org/faqs/if-i-get-an-obamacare-subsidy-in-the-exchange-is-the-subsidy-amount-considered-income/#:~:text=No.,made health coverage more affordable.

[Payroll Person]

Rules change, enforcement level changes. Knowledge increases. I hear it many times every day “we have done x for YEARS”.

For the OP, not only get an understanding of your employer practices, correct or not, also get an written opinion covered by E&O insurance from someone you pay for their opinion (and copy of their insurance coverage).

Governments are looking for newer ways to increase their income, so once a regulation becomes profit appearing, they will enforce. I once sent sample data to a NY tax agency for form printing approval. They tried dunning me for several years with the claim I was a NY employer. Easy for them to send letters and assign fines, and costly in time and money for me to defend.

States are arguing over nexus right now, because of the mass number of people suddenly working from home. Simple google searches with the proper terms can be enlightening, as likely shown by Blues. 

[Blues]

20 hours ago, docj said:

Sorry, but Obamacare subsidies are not taxable:

I didn't say they were taxable; I said they're reported on income tax returns.  Tax-exempt interest isn't taxable, either, but it is reported on income tax returns. 

If you get an Obamacare subsidy in the form of an advance premium tax credit (which is what most people do, to reduce the premium they pay each month when it's due, rather than waiting until they file their income tax return to get a lump sum back), the government sends you a Form 1095-A listing the amounts, and you use that to file a Form 8962 with your income tax return.  Form 8962 reconciles the advance premium credit you took based on your expected income for that year with what you were actually entitled to take based on your actual income for that year, now that it's known.

Lappir hasn't clarified what he was talking about, but he did use the word "subsidy," and if a person doesn't report a subsidy on his income tax return, he'll no doubt get a letter notifying him that he needs to do so, and there would be no check or direct deposit involved at all.  In other words, the scenario Lappir is describing--a letter about not reporting something for which he never got a check or a direct deposit.

And if that's the case, he definitely shouldn't ignore it.

[lappir]

I may or may not have used the right term. 

To my knowledge I did not get any checks from the government that many others did. I filed my taxes as normal, yet got a letter and a decrease in the amount of my refund because they said I had received a payment from the government to "Assist me during the Covid Epidemic."

Rod

[Kirk W]

12 minutes ago, lappir said:

To my knowledge I did not get any checks from the government that many others did.

Have you contacted the IRS about this? I realize that most of us fear the IRS but I have found that the customer service department is helpful and not difficult to work with. 

IRS Let us help you.

[podwerkz]

On 2/21/2022 at 7:13 PM, Blues said:

For the record, it doesn't apply to truckers because of a federal law that provides that their compensation is taxed in their state of residence; before the 1990 amendment that provides this, it was possible for a trucker to owe income tax in a state other than his state of residence.

 

Correct, and I think this concept should apply to other remote and gig workers also. 

BTW...I began working in logistics and transportation in 1976 and began my actual trucking career in 1982 and none of us ever paid a speck of income tax in any state other than the state we lived in....the driver's tax 'home' was based on the address that was printed on our drivers license. IF it was even 'possible' to owe state income taxes in the other states we drove thru, none of us had ever heard of it happening. How would a state even know you personally passed thru it 20 or 100 times that year? (not referring to highway fuel taxes here, those WERE paid)

Of course back then, a truck driver was filling out paper logs (which were only for showing to DOT officers when requested) and was practically 'invisible' while on the job...no software or apps existed to track the truck or the driver, and the ONLY way to communicate with the dispatcher was using a payphone once or twice a day to tell them where you were, and if you were 'on-time' to your delivery.

 

Edited February 24, 2022 by podwerkz

[Blues]

On 2/24/2022 at 8:59 AM, podwerkz said:

Correct, and I think this concept should apply to other remote and gig workers also.

With the railroad and truckers, I assume it had something to do with the federal government's authority over, and regulation of, interstate commerce, since the people affected by the law are by definition engaged in interstate commerce.  I suspect it would be a stretch to apply that to remote workers.

And even if the federal government tried, do you think the states would just acquiesce to this usurping of states' right to administer their own state income taxes?  Not a chance.  I'm sure many states would howl, and Texas and Florida would jump in regardless of the fact that they don't even have a state income tax.  😀

On 2/23/2022 at 7:34 PM, Kirk W said:

Have you contacted the IRS about this? I realize that most of us fear the IRS but I have found that the customer service department is helpful and not difficult to work with.

He posted about his previous unfavorable experience with the IRS upthread.  And these days, apparently even getting someone to answer the phone at all is a challenge. 

https://www.taxpayeradvocate.irs.gov/news/nta-blog-hello-is-anyone-there-taxpayers-and-practitioners-continue-to-experience-frustration-over-lack-of-adequate-phone-service/

Regardless, if I were him, I'd sure be trying to find out what money the IRS says I got that I don't know I got.

Edited February 25, 2022 by Blues

[Dutch_12078]

Thinking back to my field service days when I sometimes made service calls in a different state every day or so, I wonder if it makes a difference that I was not paid in each state. My pay always came from the same source, the corporate headquarters.

[Blues]

If state income tax were based on where the company's headquarters is, then all those people in Austin working for Silicon Valley tech companies would owe California state income tax, and you know Texas wouldn't keep quiet about that.

 

 

 

[Kirk W]

1 hour ago, Blues said:

then all those people in Austin working for Silicon Valley tech companies would owe California state income tax, and you know Texas wouldn't keep quiet about that.

Why would the TX revenue department even care, since TX has no state income tax? I highly doubt that TX would do anything to defend them. On the other hand TX would not help CA collect either.

Edited February 27, 2022 by Kirk W