- The Washington Times - Tuesday, October 6, 2009

ANALYSIS/OPINION:

Businesses that encourage workers with sick relatives to telecommute may find the option difficult to sell because of a harsh penalty many employees risk if they telework - the telecommuter tax (“Flu season costly for business,” Monday).

Under a state tax rule known as the Convenience of the Employer rule, states can tax nonresidents who telecommute with their in-state employers during part of the year, not just on the income they earn on the days they come to the office but also on the days they work from home - in a different state. Because these nonresidents also can be taxed by their home states on the income they earn at home, they risk double taxation for staying home to work. Thus, the threat of an extra state tax bill forces many Americans to rule out telecommuting.

Suppose, for example, a Connecticut resident with a New York employer has a child sick at home with swine flu. If the employee accepts her company’s offer to telecommute, Connecticut can tax the wages she earns in Connecticut. Under New York’s Convenience of the Employer rule, New York can tax those wages again. The double tax burden is a powerful reason for an employee experiencing no symptoms herself to overlook the risk she might pose to co-workers and travel to the office as usual.

Bipartisan federal legislation is pending that offers a solution - the Telecommuter Tax Fairness Act (H.R. 2600). This bill would eliminate the punitive tax on teleworking, prohibiting states from taxing the wages nonresidents earn in their home states. To help businesses contain the spread of infection and maximize productivity during the flu season, Congress should enact this legislation now.

NICOLE BELSON GOLUBOFF

Scarsdale, N.Y.


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