14 March 2017 Congress reintroduces Mobile workforce tax simplification legislation Representative Mike Bishop and Hank Johnson have again introduced bipartisan legislation to reduce state income tax and reporting burdens for mobile workers and their employers under the Mobile Workforce State Income Tax Simplification Act of 2017. As in years past, the bill is co-sponsored by Senators John Thune and Sherrod Brown as an identical measure under S. 540. The Mobile Workforce State Tax Simplification Act of 2015 (H.R. 2315) managed to pass the House last year; however, it did not pass the Senate before the close of the 114th Congress. The 2017 mobile workforce tax simplification bill, as in 2016, would prohibit states from imposing a nonresident income tax on the wages earned by employees working in more than one state provided employees are present and performing services in the nonresident state for 30 or fewer days in the calendar year. For applicable nonresident employees, employers would be relieved of withholding nonresident income tax and meeting any related information reporting requirements. Additionally, employers would not be subject to withholding or reporting penalties if they rely on an employee's annual determination of time to be spent working in the nonresident state (assuming there is no fraud or collusion). Businesses with employees working in more than one state need to continue to be vigilant in meeting their nonresident income tax withholding and information reporting requirements, keeping in mind that currently only 23 states waive their nonresident income tax requirements based on de- minimis earnings and/or time spent in the state. Enforcement of employers' withholding and reporting obligations continues to be aggressive in some states. Read more about mobile workforce income tax compliance in our special report. Document ID: 2017-0471 |
