Another reason to not telecommute, from an employee’s perspective
Recently, Sahil and Eric
voiced their opinions about tech workers telecommuting – working from
home, and in some cases in other geographic areas. This is
convenient for the employee because they get the obvious convenience of
working at home and freedom to schedule their day as they want, and it
saves the employer money on the marginal costs associated with housing
a worker, i.e. a computer, soda, a cube, etc. However, its can
also be detrimental to your team and your products and services by not
having any face time with the developers that are working for you.
While I agree that both sides have some merit, this article that I found via slashdot
would make me very diligent about telecommuting across state
lines. Basically it says that you can get double taxed on your
income, once from the state you live in and once by the state that your
employer is in (at least if its New York). In this case the guy
lives in Tennessee, so they have no income tax, but you could get
screwed pretty hard if you lived in Minnesota for instance and got
taxed twice.
johnpapa said,
Wrote on November 2, 2005 @ 6:03 pm
Yes, that is a very good point. My employer is in Florida (no state tax) and I live in NY (state tax exists), so I am taxed by NY only. But it can hurt you if you live in Mass and work in NY. So it can be tough for people who physically cross borders too.
breichelt said,
Wrote on November 2, 2005 @ 6:11 pm
Thats true, I forget that out east people may very well work in one state and live in another, in that situation, do people only pay taxes for the state that they work in? Certainly they dont pay both……
Anonymous said,
Wrote on November 3, 2005 @ 7:16 am
As for living in one state and working in another, it depends. I lived in PA and worked for a while in NJ, and those two states have a reciprocal agreement so that you only pay taxes in one of them. I think a lot of states that border one another have that kind of agreement, but I’m not sure.
ewise said,
Wrote on November 3, 2005 @ 9:51 am
I saw an article a while back that New York, in particular New York City was pushing for charging income tax for any telecommuter that does work for a company in their state.
This was a reaction to companies in New York getting sick and tired of having to pay very high premium salaries to local workers who on average are no better than workers elsewhere in the country.
If you can get a developer with 5 years of experience for 50k in the midwest, and an equally talented one in NYC for 85k, which are you going to pick provided they don’t have to be on site?
The market can and does adjust itself for efficiency and the only way high cost places will be able to maintain their tax base as telecommuting becomes more accepted and easy is through direct government intervention which in this case would seemly limit competition, stifle innovation, and shrink the pool of qualified candidates since no one would willingly choose to be taxed twice.
breichelt said,
Wrote on November 3, 2005 @ 10:02 am
I agree Eric, it seems like New York would be shooting itself in the foot. Businesses wont be able to find local developers because they have to pay them too much, and nobody would want to telecommute cause they’d be taxed twice. End result? Businesses leave NYC and the city loses a bunch of money. They’re trying to correct the problem by unnatural means, outside of the natural marketplace.