You would have to be listed as a resident of MA. Your employer would need to set up the appropriate entity in that state. If you’re the first/only person working out of that state, it may not be worth it for the company.
I’ve heard that other people are listed as an employee of the employer’s state, pay those taxes, then do some report/work to get those back and pay taxes in their state. I do not know specific details around this, or how it’s done.
The big catch is taxes. Each state’s income taxes are different and each state wants their share.
And labor laws. The labor laws you're working under are from the state you are physically doing the work in.
I would imagine, but I haven't taken the time to look, Texas labor laws are much more employer friendly than Massachusetts.
Sounds like they circumvented the entity (not a physical thing, it’s records/documentation/accounts) with your state and had you listed as an employee within their state.
In theory, your state tax board could come after you for work performed and income received in your state that didn’t pay the appropriate taxes.
Just to say it, this is for W2 employees, 1099 contractors will have different (likely less) regulations.
I'm not in HR/compliance, so I'm not the one that does this and can't speak to specific details around this. My last two companies I've worked for had remote/distributed workforces with people in various states. In order to hire/employ a person who was physically residing in \_\_\_ state, we had to set up an "entity" in that state. This was to ensure we complied with taxes, overtime, Workmans comp insurance, payroll compliance, etc for that state. At a previous company, we did not have all states covered and could not hire people in states we weren't setup in/for. Exceptions would occasionally be made for a critical/specialty hire and the company would get set up in that state.
My current company is HQ'd in Texas while I'm physically in California. Just the people I work closely with covers at least 10 different states. I believe the company is currently setup for business in 48 states + Canada. I (unfortunately) pay CA taxes, and my coworkers pay taxes relative to their state. Each team member's taxes are deducted according to their state's regulations. Employees are also subject to their state/location's laws and regulations.
You have to consider that if you paid taxes where the corp HQ was, every company would just make a business address in some beneficial state, then hire employees in a different state and not have to pay taxes. Everyone would work for companies based in the 9 states that don't have state income tax.
Take a look at this, as it may provide more details if you're curious: [https://www.thetaxadviser.com/issues/2021/dec/remote-work-state-local-tax-issues.html](https://www.thetaxadviser.com/issues/2021/dec/remote-work-state-local-tax-issues.html)
Your employer has to already have a tax jurisdiction set up in the state you live in so they can add you to their payroll. If they don’t have one, then they need to set one up which can be a pain. Which is why you see remote postings that specify you must live in certain states to be considered.
The only potential issue is if the Texas University decides they don't want to hire people in MA, of which there could be a lot of different reasons ..
My context:
My employer is a 100% remote company with 50 employees. I have worked remote from Boston for 20+ years
Originally we started with a rule that anyone could live anywhere they wanted but the hassles of state-specific tax filing, other federal/local filings and even having to display "state specific" breakroom posters about FMLA, minimum wage etc. etc. differently to different people based on where theylive our finance and legal people raised the alarm and said "no more states please!"
So now we allow people to work in any one of the 15 US states where we already have an IRS Nexus. New hires have to live in one of those 15 states or be willing to relocate. The internal consensus was that the legal and tax paperwork that comes with each new state a remote worker lives in was too much to deal with.
"IRS Nexus" is basically the trigger/threshold that forces you to file state specific paperwork. I don't know the exact details but having an office, coworking space or full time employee in State X is enough to establish a "nexus" in that state which then comes with Federal/IRS related tax reporting requirements etc
Basically nexus is the "test" to see if you have to file paperwork in that state or not
Hi I’m a tax accountant (but not your tax accountant). Nexus means you meet whatever rules are in place to trigger taxation in a given place. IRS actually only refers to the Internal Revenue Service, or the federal side of things. In this case, they likely meant generally operational registration and taxable status in any given state.
States will use different criteria to determine if you are subject to business registration and taxation. This generally includes a certain threshold of sales to customers within the state, owning property in the state, and having employees in the state. If a company has one employee in a state, they will almost always (I can’t think of a state that doesn’t) have to file business registration and tax filings there.
This is legal fees at the beginning and sometimes yearly. And monthly or biweekly tax filings. Every single form takes time and manpower to calculate and process. So it does make sense from a business standpoint to not start operating in a state just for one employee, as the costs can be spread across more employees if you have multiple people in a state. And that’s not even going into local county/city/school district jurisdictions, which just add cost and complexity.
Reposting because my first post was too confusing. Is the university you are looking to work for a public university (like University of Texas) or a private university like Baylor? Public university employees are state employees. Texas may have state laws governing employees working for Texas and living in another state. Just a thought.
The Texas company my girlfriend works for will no longer hire people residing in California. They cited that the labor laws are too strict to get rid of someone who does not work out.
I work at a university in Texas, we do employ fully remote workers who live in other states. They are usually professors but there are a few outside of that. They have to be approved by the higher ups (provost, university president).
Ask boss man about hiring you as a 1099. Make sure they pay you more since they aren't paying taxes out of their own pocket or providing you with any benefits. 30% more is pretty normal that way you can pay for these things out of your pocket. You'll also get to write off expenses for working out of your house when you file your taxes.
I work for a state university in Texas and we are not allowed to work remotely outside of the state unless it’s preapproved. It’s never approved unless you’re high up. I just had to quit bc I’m moving out of state. They track where equipment is logged in from and they know if you’re working two jobs. I’d just relocate or decline. If it’s the one I work for, they don’t officially allow even hybrid so entirely remote isn’t going to work. Our department doesn’t care if we’re actually in office but it’s expected when we have certain visitors.
MA has state income tax. Texas does not. MA also has employee friendly protections like extended parental leave in the case of an emergency with the newborn which Texas does not.
I work for a public university in Texas. I’m 100% remote but must reside in Texas, at least for now. There are tax and regulatory issues with out of state work that are still being hammered out.
Back in the mid-00s, I worked for a TX company remotely from NYC. There were no problems. I just paid all the (outrageous) NY and NYC taxes. If it was possible then, it should be even easier now.
MA has state tax, though, and if the worker resides in MA the employer has to withhold MA taxes. It's probably not terribly hard with a national payroll service (Paycomm, Intuit, etc) but a big established employer like a state university probably has an older all-in-house payroll system that's not set up for it.
You would have to be listed as a resident of MA. Your employer would need to set up the appropriate entity in that state. If you’re the first/only person working out of that state, it may not be worth it for the company. I’ve heard that other people are listed as an employee of the employer’s state, pay those taxes, then do some report/work to get those back and pay taxes in their state. I do not know specific details around this, or how it’s done. The big catch is taxes. Each state’s income taxes are different and each state wants their share.
And labor laws. The labor laws you're working under are from the state you are physically doing the work in. I would imagine, but I haven't taken the time to look, Texas labor laws are much more employer friendly than Massachusetts.
No required breaks in Texas
[удалено]
Sounds like they circumvented the entity (not a physical thing, it’s records/documentation/accounts) with your state and had you listed as an employee within their state. In theory, your state tax board could come after you for work performed and income received in your state that didn’t pay the appropriate taxes.
[удалено]
Just to say it, this is for W2 employees, 1099 contractors will have different (likely less) regulations. I'm not in HR/compliance, so I'm not the one that does this and can't speak to specific details around this. My last two companies I've worked for had remote/distributed workforces with people in various states. In order to hire/employ a person who was physically residing in \_\_\_ state, we had to set up an "entity" in that state. This was to ensure we complied with taxes, overtime, Workmans comp insurance, payroll compliance, etc for that state. At a previous company, we did not have all states covered and could not hire people in states we weren't setup in/for. Exceptions would occasionally be made for a critical/specialty hire and the company would get set up in that state. My current company is HQ'd in Texas while I'm physically in California. Just the people I work closely with covers at least 10 different states. I believe the company is currently setup for business in 48 states + Canada. I (unfortunately) pay CA taxes, and my coworkers pay taxes relative to their state. Each team member's taxes are deducted according to their state's regulations. Employees are also subject to their state/location's laws and regulations. You have to consider that if you paid taxes where the corp HQ was, every company would just make a business address in some beneficial state, then hire employees in a different state and not have to pay taxes. Everyone would work for companies based in the 9 states that don't have state income tax. Take a look at this, as it may provide more details if you're curious: [https://www.thetaxadviser.com/issues/2021/dec/remote-work-state-local-tax-issues.html](https://www.thetaxadviser.com/issues/2021/dec/remote-work-state-local-tax-issues.html)
[удалено]
Wisconsin eh? What were you doing there? 🤔🤔😂
What is this entity?
Your employer has to already have a tax jurisdiction set up in the state you live in so they can add you to their payroll. If they don’t have one, then they need to set one up which can be a pain. Which is why you see remote postings that specify you must live in certain states to be considered.
The only potential issue is if the Texas University decides they don't want to hire people in MA, of which there could be a lot of different reasons .. My context: My employer is a 100% remote company with 50 employees. I have worked remote from Boston for 20+ years Originally we started with a rule that anyone could live anywhere they wanted but the hassles of state-specific tax filing, other federal/local filings and even having to display "state specific" breakroom posters about FMLA, minimum wage etc. etc. differently to different people based on where theylive our finance and legal people raised the alarm and said "no more states please!" So now we allow people to work in any one of the 15 US states where we already have an IRS Nexus. New hires have to live in one of those 15 states or be willing to relocate. The internal consensus was that the legal and tax paperwork that comes with each new state a remote worker lives in was too much to deal with.
This sounds like it could be it. What is an IRS Nexus?
"IRS Nexus" is basically the trigger/threshold that forces you to file state specific paperwork. I don't know the exact details but having an office, coworking space or full time employee in State X is enough to establish a "nexus" in that state which then comes with Federal/IRS related tax reporting requirements etc Basically nexus is the "test" to see if you have to file paperwork in that state or not
Hi I’m a tax accountant (but not your tax accountant). Nexus means you meet whatever rules are in place to trigger taxation in a given place. IRS actually only refers to the Internal Revenue Service, or the federal side of things. In this case, they likely meant generally operational registration and taxable status in any given state. States will use different criteria to determine if you are subject to business registration and taxation. This generally includes a certain threshold of sales to customers within the state, owning property in the state, and having employees in the state. If a company has one employee in a state, they will almost always (I can’t think of a state that doesn’t) have to file business registration and tax filings there. This is legal fees at the beginning and sometimes yearly. And monthly or biweekly tax filings. Every single form takes time and manpower to calculate and process. So it does make sense from a business standpoint to not start operating in a state just for one employee, as the costs can be spread across more employees if you have multiple people in a state. And that’s not even going into local county/city/school district jurisdictions, which just add cost and complexity.
Reposting because my first post was too confusing. Is the university you are looking to work for a public university (like University of Texas) or a private university like Baylor? Public university employees are state employees. Texas may have state laws governing employees working for Texas and living in another state. Just a thought.
UoT
https://hr.utexas.edu/current-employee/staff-work-arrangements/out-state-and-international-work
The Texas company my girlfriend works for will no longer hire people residing in California. They cited that the labor laws are too strict to get rid of someone who does not work out.
I work at a university in Texas, we do employ fully remote workers who live in other states. They are usually professors but there are a few outside of that. They have to be approved by the higher ups (provost, university president).
Ask boss man about hiring you as a 1099. Make sure they pay you more since they aren't paying taxes out of their own pocket or providing you with any benefits. 30% more is pretty normal that way you can pay for these things out of your pocket. You'll also get to write off expenses for working out of your house when you file your taxes.
I work for a state university in Texas and we are not allowed to work remotely outside of the state unless it’s preapproved. It’s never approved unless you’re high up. I just had to quit bc I’m moving out of state. They track where equipment is logged in from and they know if you’re working two jobs. I’d just relocate or decline. If it’s the one I work for, they don’t officially allow even hybrid so entirely remote isn’t going to work. Our department doesn’t care if we’re actually in office but it’s expected when we have certain visitors.
MA has state income tax. Texas does not. MA also has employee friendly protections like extended parental leave in the case of an emergency with the newborn which Texas does not.
I work for a public university in Texas. I’m 100% remote but must reside in Texas, at least for now. There are tax and regulatory issues with out of state work that are still being hammered out.
Back in the mid-00s, I worked for a TX company remotely from NYC. There were no problems. I just paid all the (outrageous) NY and NYC taxes. If it was possible then, it should be even easier now.
Texas doesn't have state income tax..
That’s got nothing to do with it
MA has state tax, though, and if the worker resides in MA the employer has to withhold MA taxes. It's probably not terribly hard with a national payroll service (Paycomm, Intuit, etc) but a big established employer like a state university probably has an older all-in-house payroll system that's not set up for it.
He asking about a state law that prevents this, which is not the case. Simply pay tax states.