House Bill 6513 (HB 6513), An Act Mitigating Adverse Tax Consequences Resulting From Employees Working Remotely During Covid-19, and Concerning The Removal Of Liens On The Property Of Public Assistance Beneficiaries And Three-Tiered Grants In Lieu Of Taxes Program, passed the House today and is expected to pass the Senate later this week or early next week.
Once passed, Section One of this measure will ensure that Connecticut residents will not face double taxation on their 2020 taxes. Connecticut residents will instead receive a credit against their Connecticut personal income taxes. This credit will be for taxes paid in the other state(s) where that employee – due to COVID-19 – is now working remotely in Connecticut versus their typical work state outside Connecticut.
When HB 6513 is adopted, it still poses questions for 2021, as many Connecticut residents continue to work remotely.
Until Congress either passes workforce mobility legislation or the United States Supreme Court issues a decision on a state's ability to tax a nonresident telecommuter, this problem will likely only grow – in scope, complexity, and unfairness to employees. Telecommuting is not expected to stop. Some individuals will return to the office full time, others will return to the office part time, while others will remain telecommuting full time.
In addition to preventing double taxation, this bill provides employers the assurance that they will not be subject to new taxes in 2020 solely due to an employee working from home because of the pandemic.
The CTCPA will continue to advocate in the best interest of its members. We will update as soon as we hear more about this issue as it relates to the 2021 tax year.