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Mobile Workforce Bill Attempts to Simplify Tax Reporting Requirements

The Mobile Workforce State Income Tax Simplification Act of 2019 proposes to simplify tax reporting requirements for employers and workers where multiple state jurisdictions are concerned.
Workers discuss the tax requirements they must follow when they travel from state to state to perform work.

If you have workers who are employed in multiple states, you’ll be interested in a bill introduced to the U.S. Congress. The Mobile Workforce State Income Tax Simplification Act of 2019 proposes to simplify tax reporting requirements for employers and workers where multiple state jurisdictions are concerned.

Many states have different income tax withholding requirements for employers, as well as require employees to file personal income tax returns when temporarily traveling for work purposes to states in which they do not reside.

The legislation would establish a 30-day safe harbor from withholding obligations for employers – including businesses, associations, governments, and unions – and personal income tax requirements for their traveling employees. It is important to note that the 30-day threshold is not continuous, so an employee could accumulate the 30 days over the course of a year. In short, if an employee travels to a nonresident state for fewer than 30 days, they incur no personal income tax liability nor would their employer have to withhold. The legislation does propose several exceptions: professional entertainers, professional athletes, and certain other celebrities are not included in the act.

This isn’t the first time the legislation was introduced. In fact, it has been introduced in every Congress since 2006, and although it has had success in the U.S. House of Representatives in the past, it has never advanced beyond the Senate Finance Committee.

As written today, the act would take effect on Jan. 1 two years after enacted, and retroactive application is expressly prohibited.   

 

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Andrew Gargana is the senior federal compliance analyst for Paychex, Inc., He leads the federal payroll tax compliance activities of the company.
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