U.S. Sens. John Thune (R-S.D.), ranking member of the Senate Finance Subcommittee on Taxation and IRS Oversight, and Sherrod Brown (D-Ohio), a senior member of the Senate Finance Committee, today reintroduced the Remote and Mobile Worker Relief Act (S. 1274), bipartisan legislation that would ensure that mobile workers, including medical professionals from around the country, who supported areas hard hit by the COVID-19 pandemic do not face unexpected or increased state income tax bills. The bill would also address potential problems remote workers are facing during the pandemic, including the possibility of having their state income taxes become out of balance because they worked from home in a different state than their ordinary place of employment during the pandemic.
“Frontline workers should not have to worry about facing a higher or an unexpected tax bill because of their work and sacrifice to help Americans throughout this crisis,” said Thune. “Doctors, nurses and other workers who voluntarily crossed state lines to help during the pandemic deserve a debt of gratitude, rather than an unexpected tax bill. This bill ensures these mobile workers are not unfairly taxed, while also providing greater tax certainty for those who are working remotely.”
“Healthcare workers have been on the frontlines of this pandemic for months now,” said Brown. “Not only are they combatting this virus in their own communities, but many of them have travelled across state lines to help in areas that have been hit hardest. A surprise tax bill is the last thing they need. We should make it easier for these mobile workers to support themselves and their families.”
The Remote and Mobile Worker Relief Act would:
- Provide uniformity in state and local income tax assessment and withholding obligations for employees that may travel on behalf of their employer to work in a state that is different from the state where they reside. The legislation would establish a permanent 30-day threshhold before any income tax obligations can be enforced by the non-resident state. For the tax years 2020 and 2021, the threshhold is set at 90 days to help ensure that medical professionals and other workers who traveled to support areas hard hit by the COVID-19 pandemic do not face unexpected or increased state income tax bills from these states.
- Preserve the status quo by allowing employers to continue to assign the income for employees temporarily working remotely due to the COVID-19 pandemic at their pre-pandemic work location versus the location where they may have been working remotely. For example, if you are generally taxed in North Carolina because your job is there, but you live in South Carolina, your tax situation wouldn’t change simply because you worked from home during the pandemic. These provisions provide much needed certainty by placing states, employees and their employers in the same position they would have been in pre-pandemic. These provisions are only applicable for the 2020 and 2021 tax years.
The legislation is built off of Thune and Brown’s Mobile Workforce State Income Tax Simplification Act, which they introduced last Congress. The Remote and Mobile Worker Relief Act is supported by the South Dakota CPA Society and the American Institute of Certified Public Accountants (AICPA).