Today Steve from Waltham, MA wants to know what to do about an employee. “We have an employee who is currently living and working in MA. She is moving to Florida and would like to continue to work for our company in Florida (while still reporting to her same manager in MA). We agreed.
My question is, should she still be taxed in MA because it was her idea and her benefit to move to FL while continuing to work for us? (After all, the company did not ask her to move; we simply allowed her to do so).
Oh Steve,
What a wonderful arrangement! No, she wouldn’t be taxed in MA.
You may want to check into the rules for Florida payrolls. While they don’t have income taxes, they do have unemployment and/or disability, if I am not mistaken. No doubt there will also be some workers comp requirement. So check to see if your carrier will cover her there.
https://sun6.dms.state.fl.us/dor/businesses/newbusiness_startup.html
While this may be an added bookkeeping burden for you, it’s not minor. Overall, the additional cost is far, far less than the cost of advertising for, or recruiting a new employee to fill that position. And this arrangement saves you a fortune in training costs and learning curve time.
She will be saving a fortune by not having to pay Massachussetts taxes… or having to look for a job.
Incidentally, the concept of working at home for your own convenience vs your employers convenience primarily applies if your employer is within driving distance and you have a working space on their premises.
In this case, she will be in another state entirely. So, she’ll be able to take advantage of office in home benefits and confusions to her heart’s content.
Good for you – making sensible flexible arrangements for a valuable employee. It’s a win-win arrangement all around.
Naturally, you’ll find answers to all kinds employment issues & tax questions – and lots of tax resources – free, where? Where else? At TaxMama.com !
- Ask TaxMama :: Where taxes are fun and answers are free
- Florida Dept of Revenue :: New Business Start-Up information
File Download (2:29 min / 0.6 MB)
