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June 29, 2021

Indiana ends COVID-19 nexus relief provision for teleworkers

The Indiana Department of Revenue announced that its previous relief from the assertion of nexus under certain circumstances in connection with COVID-19 will expire on the later of June 30, 2021 or the expiration of an existing physician's order in place prior to June 30, 2021.

As previously reported (see EY Tax Alert 2020-0912), the Department previously announced that in connection with COVID-19, it would not assert nexus or that the protections of the federal Interstate Income Act of 1959 (P.L. 86-272) were exceeded due to a temporary remote work assignment within the state.

This relief applied only for the period in which:

  • There was an official work-from-home order issued by an applicable federal, state or local government unit
  • There was an order of a physician in connection with COVID-19 or an actual diagnosis of COVID-19, plus 14 days to allow for return to normal work locations

The Department cautioned that if the employee remained in Indiana after the temporary remote work requirement has ended, nexus could be established for that employer.

Ernst & Young LLP insights

This previous guidance did not change the requirement that employers with business operations in Indiana withhold Indiana state income tax on the wages of resident employees (other than employees temporarily working from home under the limitations set forth by the Department), regardless of where those wages were earned.


Contact Information
For additional information concerning this Alert, please contact:
Workforce Tax Services - Employment Tax Advisory Services
   • Kristie Lowery (
   • Kenneth Hausser (
   • Debera Salam (


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