There has always been a small remote workforce, but for the past year the COVID-19 pandemic and the government-ordered shutdowns that followed made remote work very common. According to a recent survey by Flexjobs, 65% of remote workers do not want to return to their offices and many employers are continuing to use a remote work arrangement.

Having an employee working from home in a state that is not the same as where the employer is based creates several issues: where to withhold state and local income tax and whether the remote workforce creates nexus such that the employer owes income or franchise tax to the remote state. It may also create income tax complexity for remote workers.

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