Doug Schwartz Discusses Tax Issues Related to Working Remotely Out of State

Doug Schwartz was quoted extensively in the Daily Journal article, “Tax Issues Loom For Working Out Of State” (subscription required). The article examines how the increase in remote working situations bought about by COVID-19—including attorneys working from states where their firms are not located—is likely to create tax issues for law firms. Commenting on the issue, Doug said that “tax withholding has always been an issue for states close to each other, such as New Jersey and New York” but the pandemic has “made the situation more complicated.”

For instance, the pandemic has led to some lawyers and law firm employees relocating to other states to be closer to family. This can force law firms to examine their employees’ connection to the state where they have relocated and are performing their work.

“Does the law firm have to file tax returns in that state or start withholding from employees in that state?” Doug asked. “And the employee has an issue if he or she spends enough time in another state. Does he or she become a resident of that state and pay taxes in that state? That’s going to be the big issue...”