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September 27, 2020 4:06 pm
So you're working remotely and want to move? Read this first
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After all, if you don't have to be tethered to your office, maybe you prefer to be closer to the family (more babysitting!). Or you'd like to relocate someplace where you can hike or surf. Or you might just want to move someplace cheaper or less crowded.
But if you're eyeing a move to another state or region, factor in how that may affect your job, your pay, your benefits, and your taxes.
Before calling the movers, here are four questions you'll want answers to from your HR and benefits department as well as from a professional tax adviser.
Will my company even let me work somewhere else?
No matter how cool your company is with you working from home, that doesn't mean it will be fine with your home being anywhere.
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If you move someplace where your company doesn't have employees or satellite offices, it may have to incur greater administrative and tax burdens to satisfy its legal duties as an employer.
"Not all employers will be willing to let employees work out of state because it may mean additional obligations on their part," said Katie Brennan, a knowledge advisor at the Society for Human Resource Management.
Or you may work for an employer that simply wants the staff back in the office as soon as it's safe to gather in large groups again. So it may not want to let everyone scatter to the wind now.
Will relocating affect my paycheck?
Possibly.
How much you are paid will depend in part on the cost of labor where you choose to live, said Tauseef Rahman, a partner specializing in compensation strategies at the HR consulting firm Mercer.
So if you move to a less expensive locale where labor is cheaper, you may get paid less. Where it is more expensive, you may get paid more.
But if you have a nationally competitive job and one that doesn't necessarily require you to be at a fixed location, there may be a much smaller difference in your pay than you'd expect, Rahman said. That's because your employer has to compete with companies everywhere for your services.
How will my benefits change?
State and local laws regulate many benefits that employers provide.
The biggest is health insurance. You may have to switch to another plan offered by your employer if the insurer you have now doesn't offer coverage in the state where you're moving.
Or it may be that none of the insurance plans offered by your employer are available in your new state or region because your company doesn't do business there.
That could mean you need to go on a public exchange or your employer may come up with another option.
Your paid leave benefits may change, too -- for better or worse depending on where you're going.
For instance, California doesn't allow employers that offer paid vacation days or paid time off to impose a "use it or lose it" policy as many states do. Instead, those days are considered earnings that can accrue and must be paid to you when you leave your job.
Or you may gain or lose a required minimum number of paid sick days depending on the jurisdiction where you relocate.
Also, if there are any changes to your paycheck when you move, that will change how much you receive in matching contributions to your 401(k) since they're based on a formula tied to your earnings.
How will moving affect my taxes?
This is the most complicated question to answer. So consult with an accountant or other qualified tax preparer. Otherwise, you may find yourself saddled with a bigger tax bill.
Most states have income taxes and they tax earnings generated by work done in-state. But find out if the state where you are living now and the state where you're moving to have a reciprocal tax agreement -- meaning if you work in one but live in the other, you will only owe income tax to one state, most typically your home state. If not, you may end up owing taxes to both states.
Find out, too, if you'll be affected by any of the seven states -- Arkansas, Connecticut, Delaware, Massachusetts, Nebraska, New York, and Pennsylvania -- with a "convenience of the employer" rule.
"That rule stipulates that you owe income taxes where your company office is located," said Jared Walczak, vice president of state projects at the Tax Foundation. "[Your employer's] state will want to tax you, and your home state may tax you too because you're living and working there."
And if you're relocating from a high-tax state like New York to a state with no income tax -- such as Florida -- you still may end up paying income taxes barring a reciprocal tax agreement or other provision.
So first ask your payroll tax department how your withholding will change when you move.
"The employer's only obligation is to the state to make sure they [withhold taxes] properly," said Cosimo Zavaglia, a partner in the tax practice of law firm Morgan Lewis.
But when you file your taxes, if you think you've been over withheld, claim a refund. Just make sure you have backup documentation about your work location to make your case if you get audited, Zavaglia said.
Such documents might include a calendar or travel records. And if your company is based in a state with a "convenience of the employer" rule, you also may need documents from your employer confirming your assigned work location is no longer where the company is based.
Best advice to protect yourself: "Know the rules of the states you're dealing with," Zavaglia said.
June 6, 2021 8:20 am
Working remotely was something that I tried doing when I first moved from Florida to here. It was very difficult finding a job and I never found a remote one, especially all due to COVID. I've always been very back and forth about working remotely or not. If I would actually like it, and if I would actually be able to get any work done.
June 6, 2021 8:21 am
I also can not imagine moving and because of this having to pay double taxes because of your new home state and having to pay the taxes of your works office. I don't think everyone thinks about these types of things before getting up and moving.
June 13, 2021 10:32 pm
@kaytlynmolinaiectskin-com i definitely havent thought about having to pay double taxes if you were to move while working remotely, definitely something to think about
June 13, 2021 10:34 pm
ive wanted to work remotely especially during covid but its been hard trying to find a job where i could work from home. but i do not think i would even enjoy it too much, i hated doing completely online classes at ODU and it made doing school work that much harder and more complicated. also getting up and getting out of the house gives me routine and helps to ensure im not in the house all day
August 15, 2021 10:13 pm
While the idea of remote working sounds great, I do think it's much more complicated than most people consider it to be. All of the points made here about moving while taking on remote work are completely valid. I think it's also important to consider a job that is remote now may not be remote anymore once Covid is really over with. It's a risky move to make to move while working a remote job, and I definitely think the points made here about the complications of it are really important to consider.
October 8, 2021 9:52 pm
Remote working opportunities have opened up significantly with the pandemic. I have had a number of friends who have been given the opportunity to work from home, or remotely. This has given the freedom to roam and travel freely. My bestfriend just spent 7 weeks traveling all over Europe while maintaining a 40 hour work week.
October 8, 2021 10:02 pm
@delaneyhiggonsiectskin-com Youre completely right, working from home is so much more complicated than it seems. In my office we have 3 salesmen , they rotate who works from home throughout the week. It is so much more complicated to get things done without them sitting right infront of me. If someone calls, i have to message them and let them know whos calling and the run down basically. I then have to wait for them to reply in order to send the client over. Its a whole process when it could be simple, BUTTTTT im completely jealous i cant work from home.
October 8, 2021 10:04 pm
@kaytlynmolinaiectskin-com Ive never worked from home but ive done college completely online. I hated it but mostely because i could not focus and never got anything done!!
February 5, 2022 5:58 pm
Remote working has saved a lot of people from layoffs. I am thankful that throughout Covid ive been able to stay in an office setting and I say that because I get bored staying at home. I feel like I would probably procrastinate and not even get my work done, which I hear is an issue with a lot of people that work from home. Another issue is that people are so used to working from home that they dont want to go back to working in their workplace.
February 7, 2022 1:25 pm
I think remote working is a great alternative for the people who can really use it to their advantage. For example my sister in law is has a 1 year old who still is not old enough for daycare yet, so with the pandemic she has been able to work remotely from her home and she is also able to stay with her baby as well and not have to worry about stressing about childcare and things like that. Thankfully a lot of jobs are able to offer remote working especially during the pandemic which saved a lot of people from being laid off. Unfortunately there are a lot of jobs that you physically cannot work from home, like the estheics industry or the hair industry.
February 7, 2022 1:27 pm
@delaneyhiggonsiectskin-com I agree, it can be complicated and it may see a little bit easier than people make it to seem. The obvious would be technical difficulties, technology is great and all but sometimes it just doesn't work and really can make our lives difficult.
February 7, 2022 1:30 pm
@jaydensugickiectskin-com I agree. I am the same way, while working from home would be nice, especially to be able to stay in the comfort of your own home but I need routine and I get restless very easily. Working from home would not be something I could see myself doing.
February 15, 2022 2:50 pm
Remote working is a great alternative for everyone that is in need of more flexibility or just to be safe during this pandemic. I feel that every company should offer remote positions for worker that rather work from the comfort of their home instead of an office building.
This post was modified 2 years ago by Keyonna Starks
February 20, 2022 10:39 pm
I previously worked for a large corporate company and starting in spring 2020, I started working from home. It was great for a while and it was so nice just being home immediately after clocking out. After maybe a year, the new wore off and it just wasnt the same as being in the office, as a team we were less motivated and it just wasnt as fun. We did receive a ton of emails starting in early 2021 about working out of different states and taxes. It seemed like a nightmare.
February 20, 2022 10:42 pm
@keyonnastarksiectskin-com I agree for multiple reasons. I think that people should have the option to work from home as long as theyre working. Its so great to have that flexibility and so many people benefit from it. I also think that it is such a waste to have these huge building that fit thousands of people in it, when it can be used for some much more than just office space.
February 20, 2022 10:45 pm
@kaytlynmolinaiectskin-com Yea, I think it would be too difficult to move out of state while working remotely, especially for a corporate job. Their rules change all the time & they could also tell you to come back into the office at anytime. And we can see, it really does make taxes more difficult.
March 20, 2023 1:34 pm
Working remotely offers a lot of flexibility, but can be difficult for some people since the majority of the time you do it in the comfort of your own home. I personally do not think I would enjoy it because I have a hard time staying focused when I am at my house.
March 20, 2023 1:41 pm
@abigailcochraneiectskin-com That is so cool that your friend got to travel like what while working. I have considered working remotely mainly for the flexible schedule, but I do enjoy working with and being around others.
March 20, 2023 1:55 pm
@delaneyhiggonsiectskin-com I agree, remote working can entail much more than what many people think. A lot of jobs may only be remote temporarily. I think it is important to know what you're getting into before starting something.
March 23, 2023 12:23 pm
@abigailcochraneiectskin-com Working from home is an amazing choice for women or men with children.
March 23, 2023 12:33 pm
@kaytlynmolinaiectskin-com Very true! working from home is not for everyone, my mother loves it but I personally think for myself i need daily interaction with other people. But for individuals with busy lives I don't think it's a bad idea nor does it kill productivity according to the article.
March 23, 2023 12:38 pm
Working from home is not a bad idea, i think it's a very good idea and gives people more options to choose as far as work or career. The internet now is a very easy access tool we use for everything. Why not use it for work too? in the comfort of your own home. It's not for everyone, I would never do it, but it does not kill productivity if you're working from home for the RIGHT reasons.. such as children to tend to, having more time for hobbies or interest & having time for personal relationships more.
