23 June 2017 House passes the Mobile Workforce State Income Tax Simplification bill — moves now to Senate for consideration On June 20, 2017, the House of Representatives passed the Mobile Workforce State Income Tax Simplification Act of 2016 (H.R. 1393). The bill now moves to the Senate for consideration. (See S.540.) This measure also passed the House last year; however, it failed to make it through the Senate before Congress adjourned. The bill met a similar fate in 2012 with the House passing it but not the Senate. On the Senate side, there is some indication that New York Senators Chuck Schumer and Kirsten Gillibrand have concerns about the measure, raising the chance that Senate Majority Leader Mitch McConnell will not allow the bill to proceed without 60 votes. Identical to the bill passed in 2016, nonresident income tax would be simplified and streamlined for individuals and employers by prohibiting states from imposing income tax on individuals who work within a 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. Recordkeeping would also be simplified by releasing employers from 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 2017 updated special report. Document ID: 2017-1010 |
