Sen. Haskell Admonishes New York, Prevents Double Taxation

Press release from CGA:

March 3, 2021

Citing a need to stand up to bullies, State Senator Will Haskell (D-Westport) spoke out on the Senate floor today about the challenging tax situation facing commuters who live in the 26th district.

Although commuters have worked from their Connecticut homes over much of the last year, New York's state government is insisting that they owe their income taxes to Albany. In an effort to avoid subjecting Connecticut residents to double taxation, the legislature approved a tax credit for residents who pay income tax to states that require nonresident employees to pay nonresident income tax on income earned while working remotely. Additionally, Connecticut recently filed an amicus brief in a pending Supreme Court case involving the states of New Hampshire and Massachusetts. A decision by the Court in New Hampshire's favor would likely allow commuters to pay their income taxes to Connecticut, benefiting from a lower tax rate and bringing roughly $400 million to support state initiatives.

"Starting at a young age, we teach students to stand up to bullies. So today, we need to set a good example and call out the outrageous claim that New York is entitled to the hard-earned tax dollars of Connecticut residents," Sen. Haskell said. "I represent a lot of commuters. They use Connecticut roads, their kids attend Connecticut schools, they breathe the clean air and drink the clean water that we fight in this building to protect. Over the last year, they likely wore a mask procured by Connecticut's Department of Public Health, or received a COVID-19 test or vaccine at a clinic established here in Connecticut. They haven't set foot in the state of New York in months, and their elected officials sit in this Capitol -- not in Albany. This may seem like a small issue. But it represents an important chance to give our constituents a tax break while bringing in over $400 million to support critical public health initiatives."

The Senate today passed Bill 6516, "An Act Mitigating Adverse Tax Consequences Resulting From Employees Working Remotely During COVID-19, And Concerning The Removal of Liens On The Property of Public Assistance Beneficiaries And A Three-Tiered Grants In Lieu Of Taxes Program."

When COVID-19 arrived in our region, Connecticut and New York jointly scaled back public transportation, closed offices and imposed stay-at-home orders. Since that time, most of the 158,000 Connecticut residents who typically work outside of the state have stayed home to protect public health.

By law, Connecticut and New York jointly employ the "convenience of the employer" rule. This means that commuters who decide to work from their Connecticut home at their own convenience would owe taxes to the state of New York. Commuters who are asked to work from home at the convenience of their employer would owe taxes to Connecticut. As Connecticut made clear in its recent amicus brief, commuters obeying stay-at-home orders were evidently working remotely at the convenience of their employer, not their own convenience.

This press release was produced by CGA. The views expressed here are the author's own.