Remote Workers State Tax Filing Relief

TXCPA Joins AICPA, COST in Letter Urging Congressional Support

September 2020

TXCPA has joined more than 120 employers and organizations across the nation in signing a letter to Congressional leaders urging them to support state tax filing and withholding relief for remote workers during the pandemic by enacting Section 403 of S.4318, the American Workers, Families and Employers Assistance Act, and a related measure, S.3995, the Remote and Mobile Worker Relief Act.

The accounting profession has been consistent in its support of state tax filing relief for remote workers. This legislation would enhance compliance with state personal income tax laws and greatly simplify the onerous burdens placed on employees who travel outside of their resident states for temporary periods and on employers who have corresponding withholding and reporting requirements.

Every workday in our country, thousands of Americans travel outside their home state on business trips for temporary periods. Each state has its own set of requirements for filing non-resident individual income tax returns and commensurate rules for employer withholding on those employees. Most individuals are not aware of this patchwork of non-resident state income tax filing rules and many employers are required to incur extraordinary expenses to comply with withholding requirements. States likewise expend considerable resources in processing de minimis tax returns and refunds for non-residents.

This legislative language would provide relief to Texas businesses from the current web of inconsistent state income tax and withholding rules across the country that adversely affect our state’s employers and employees.

“This legislation is an integral step in simplifying and removing unnecessary obstacles to administering the broader tax system,” said AICPA Vice President of Taxation, Edward Karl, CPA, CGMA. “Employees and employers are asking Congress for their help and we strongly urge them to enact this important legislation. AICPA has long advocated for this relief and supported Senators Thune’s and Brown’s efforts earlier this year for a consistent and uniform de minimis rule for non-residents’ state taxation and withholding.”

With an unprecedented number of individuals working remotely, now more than ever it is necessary to adapt to our current economic reality. TXCPA believes that this legislation is critical to the fiscal health of Texas, our businesses and our taxpayers, and we are asking Congress to provide the relief our country needs.