April 8, 2020 Indiana will not assert nexus for employees temporarily working from home in the state due to COVID-19 The Indiana Department of Revenue announced that under certain circumstances in connection with COVID-19, it will not assert nexus or that the protections of the federal Interstate Income Act of 1959 (P.L. 86-272) have been exceeded due to a temporary remote work assignment within the state. This relief applies only for the period that:
The Department cautions that if the employee remains in Indiana after the temporary remote work requirement has ended, nexus may be established for that employer. Ernst & Young LLP insights This guidance does not change the requirement that employers with business operations in Indiana (other than employees temporarily working from home under the limitations set forth by the Department) withhold Indiana state income tax on the wages of resident employees, regardless of where those wages were earned. This announcement does, however, bring much needed relief to Indiana employers that otherwise could have been forced to incur other business taxes (e.g., sales & use, unemployment insurance) merely because employees are temporarily working from home within Indiana due to the COVID-19 emergency. ———————————————
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