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Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 29558
Experience:  Taxes, Immigration, Labor Relations
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If I work in Puerto Rico remotely for a company that has offices

Customer Question

If I work in Puerto Rico remotely for a company that has offices in California, Colorado, Georgia, Indiana, Connecticut, New York, Nevada, Wisconsin, St Louis what taxes do I have to pay. I will be working 100% from Puerto Rico from my home and the company does not have offices in Puerto Rico. I will not have any residency in any of this cities just Puerto Rico. Thanks Francisco
Submitted: 3 years ago.
Category: Tax
Expert:  Lev replied 3 years ago.

Lev :

Hi and welcome to Just Answer!

Lev :

Your state income tax liability is based on both - your residency and your workplace location.
The location of your employer and where they have offices are irrelevant.
If you are a resident of Puerto Rico - you are responsible for Puerto Rico income tax based on your residency.
If you are working as independent contractor - your workplace is where you physically provide services.
If you are working for the US company as an employee - the company should determine in which state your workplace is located and should register in this state. For instance - if your workplace is in Puerto Rico - your employer should register with Departamento del Trabajo y Recursos Humanos (DTRH) and pay unemployment taxes.
However if your employer provides the workplace in a different location - for instance in California - your wages are subject of California income taxes.
If your employer allows you to work remotely for your convenience - that doesn't change the location of your workplace for income tax purposes - and your personal income tax liability is based on the location of your workplace. Thus - if you are not sure - you need to contact your employer and verify.
When you receive a paycheck stub - it should indicate if your wages are subject of income tax for any specific state - and such taxes should be withheld.
In case your wages are subject of income taxes in several states - you will be able to claim a credit in your resident state - thus effectively will avoid double taxation of the same income.

Expert:  Lev replied 3 years ago.
Just in case you were not able to use the chat - I am switching to Q&A mode and posting the answer below.
Please feel free to communicate if you need any clarification or have other tax related issues.

Your state income tax liability is based on both - your residency and your workplace location.
The location of your employer and where they have offices are irrelevant.
If you are a resident of Puerto Rico - you are responsible for Puerto Rico income tax based on your residency.
If you are working as independent contractor - your workplace is where you physically provide services.
If you are working for the US company as an employee - the company should determine in which state your workplace is located and should register in this state. For instance - if your workplace is in Puerto Rico - your employer should register with Departamento del Trabajo y Recursos Humanos (DTRH) and pay unemployment taxes.
However if your employer provides the workplace in a different location - for instance in California - your wages are subject of California income taxes.
If your employer allows you to work remotely for your convenience - that doesn't change the location of your workplace for income tax purposes - and your personal income tax liability is based on the location of your workplace. Thus - if you are not sure - you need to contact your employer and verify.
When you receive a paycheck stub - it should indicate if your wages are subject of income tax for any specific state - and such taxes should be withheld.
In case your wages are subject of income taxes in several states - you will be able to claim a credit in your resident state - thus effectively will avoid double taxation of the same income.