Remote Work Taxes by State: What U.S. Remote Workers Need to Know

Remote work may have removed the daily commute, but it has not removed state borders from the U.S. tax system.

If you live in one state, work for a company connected to another, and sometimes perform your job from several locations, the apparently simple question “Where do I pay tax?” can become surprisingly complicated.

There is no single U.S. rule. New York continues to apply its well-known convenience-of-the-employer framework. New Jersey responds to similar rules used by certain other states. Connecticut has created additional relief for some residents who successfully challenge another state’s convenience rule. Nebraska changed important nonresident rules beginning in 2025.

Why Remote Work Creates a State-Tax Problem

Consider a worker who lives in New Jersey, is assigned to a Manhattan office and spends most of the week working from home.

It might seem intuitive that days physically worked in New Jersey should simply be New Jersey workdays.

New York does not always see it that way.

Under New York’s current nonresident instructions, normal home-working days may still be treated as New York workdays when the employee’s assigned or primary workplace is a bona fide employer office in New York. Work performed outside New York because of genuine employer necessity can receive different treatment.

Read the New York Tax Department’s official IT-203 instructions →

Remote Work Taxes by State: A Practical Comparison

The Five Questions That Usually Matter

New York: The Rule Remote Workers Need to Understand

New York remains one of the clearest examples of why remote workers cannot look only at their home address.

For a nonresident whose assigned or primary workplace is an established New York employer office, New York’s instructions distinguish between work performed outside the state because of the necessity of the employer and work performed elsewhere primarily for the convenience of the employee.

Worker A

The employer closes the worker’s New York office and formally assigns the employee to a workplace outside New York.

Worker B

The employer keeps the employee assigned to Manhattan but allows the employee to work from home because commuting is inconvenient.

The physical act of opening a laptop at home may look the same. The tax analysis may not be.

New Jersey: When One State Responds to Another

New Jersey does not describe itself as imposing a universal convenience rule on every nonresident telecommuter. Instead, its law applies a similar test to residents of states that impose comparable rules.

Current guidance also makes an important distinction: if an affected nonresident performs no services in New Jersey during the calendar year, a minimum connection is generally required and wages are not allocated to New Jersey under this specific rule simply because the employer is located there.

Nebraska: A Real Rule Change From 2025

Nebraska changed its treatment of certain compensation earned by nonresidents for taxable years beginning on or after January 1, 2025.

Connecticut Is Also Responding to Cross-State Tax Conflicts

Connecticut created an additional credit for certain residents who successfully challenge another state’s application of a convenience-of-the-employer rule.

The credit is equal to 60% of the specified additional Connecticut tax described by the state’s guidance.

How Is This Different From South Korea?

For someone familiar with South Korea, the American system can feel particularly unusual.

Moving a laptop from Seoul to Busan does not normally create the same state income-tax sourcing dispute that can arise when a U.S. employee moves between New York and New Jersey.

Working for Two Companies in Korea

A person can have genuine employment relationships with more than one business. Remote work does not automatically convert either job into freelance work.

Korea’s National Pension system recognises people working at two or more covered workplaces, while Employment Insurance follows different multiple-employment rules and generally establishes insured employee status through one workplace according to statutory priority rules.

What About Korea’s “3.3%” Withholding?

In Korea, freelance income is often casually described as “3.3% work.”

But an employee cannot simply choose 3.3% withholding because remote work feels like freelancing. The substance of the working relationship matters.

Why This Matters for Digital Nomads

Digital nomads often begin thinking about taxation only after crossing an international border.

But international remote work can add several separate compliance layers:

• personal tax residence;
• employment-income taxation;
• payroll obligations;
• social security;
• permanent establishment;
• immigration permission;
• insurance; and
• employer compliance.

A Remote Worker Checklist Before Going Abroad

1. Your legal state or country of residence.
2. Your employer’s assigned or primary office.
3. Every jurisdiction where you physically perform work.
4. The number of workdays spent in each jurisdiction.
5. Whether your employer requires or merely permits remote work.
6. Whether your remote location is formally recognised.
7. Which jurisdiction’s tax is withheld from your pay.
8. Whether tax credits are available elsewhere.
9. Whether cross-border work has employer approval.
10. Whether social-security or insurance obligations change.

Working Abroad? Tax Is Only One Part of the Problem

For longer stays, also check territorial insurance coverage, trip-duration limits, medical coverage, emergency evacuation and local health-insurance requirements.

Security Matters When Your Office Moves With You

If you use an employer-issued device, company security policy comes first. Never use a VPN to bypass geographic or corporate-access restrictions.

Build a Backup Internet Plan Too

Before relying on mobile data abroad, check hotspot permissions, high-speed limits, local coverage and whether your employer’s VPN and MFA systems work correctly.

Going to South Korea?

Bottom Line

Sources & Official Resources

This article is for general informational purposes only and does not constitute tax, legal, payroll, employment, immigration, social-security or insurance advice.