Watch Out for Tax Consequences When Hiring Telecommuters Outside Your State
If you allow employees to telecommute, be sure to consider the potential tax implications. Hiring someone in another state, for example, might create sufficient nexus to expose your company to that state's income, sales and use, franchise, withholding, or unemployment taxes.
And the employee might be subject to double taxation if both states attempt to tax his or her income - the recent Supreme Court ruling in Comptroller of the State of Maryland v. Wynne addressed a similar issue...(Read More)