The Complete Guide to State Taxes for Mobile Workers

An overwhelming 93 percent of mobile workers agree: Technology simply can’t replace old-fashioned, face-to-face interactions. With that in mind, it should come as no shock that more than half of U.S. workers still travel for work regularly.

According to a recent TSheets survey, 62 percent of U.S. employees have traveled out of state for work within the last 12 months. 38 percent of those mobile workers have spent more than a month away from home each year, which raises a good question:

Are employees required to file multiple state tax returns for working in another state? 


If your employees travel to states like California or New York (two of the most frequently visited states for business trips), they may be required to pay additional income tax in those states.

Many states have laws that require mobile employees to pay state income taxes upon spending time, working, or earning money within that state. But not many employees abide by those laws.

According to the Tsheets survey, less than 1 in 4 mobile workers currently pay additional state income taxes, which means a majority of mobile employees could be breaking the law. Only 23 percent of over 500 respondents said they pay additional state income taxes when they work out of state. The remaining 77 percent of business travelers could potentially be committing tax fraud.

Fortunately, the law for state taxes imposed upon mobile workers could soon change.

The Mobile Workforce State Income Tax Simplification Act

Congress has recently been discussing this act which, if passed, would prevent individual states from taxing nonresidents who work in their state for less than a month within a calendar year.

This means that state income tax laws would no longer apply to mobile workers until those workers have spent more than a month working in that state over the course of 12 months.

How will the Simplification Act affect mobile employees?

Many employees will still be required to abide by state income tax laws in each state they work in, but the remaining 62 percent of mobile employees (who spend less than 30 days working in another state) can travel without paying additional income taxes. It’s good news for the majority of mobile workers, though many wish the news was better.

How can you ensure you and your mobile employees are complying with state income tax requirements?

Knowledge is power. It’s important for you and your employees to know exactly how much time they’re spending on the clock, especially whenthey’re traveling for work.

If the Tax Simplification Act passes, your employees will be responsible for tracking the hours and days they spend working in other states — that is, unless you, the employer, has a time and attendance system “that tracks where the employee performs duties on a daily basis.”

Invest in an automated time tracking software (like TSheets) that allows your employees to quickly and easily track their hours worked both in the office and out on the road. And with GPS location tracking built in, you can rest easy knowing you and your employees are covered come tax time.

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