New York State Tax Attorneys: Fighting the Employer Convenience Rule

New York State Tax Lawyers: Fighting the Employer Convenience Rule

Are you facing unjust tax demands from New York State under the controversial “convenience of the employer” rule? Our law firm can assist you seeking to overcome this tax rule if your situation works with the factors discussed below. We defend nonresident taxpayers against aggressive New York state tax claims.

The “convenience of the employer” rule has long been a contentious issue, with New York State’s Department of Taxation and Finance applying it to allocate income to New York for tax purposes, often unfavorably to remote and out-of-state workers.

The recent case of Edward Zelinsky highlights the state’s stringent stance on this rule, even amidst the global shifts to remote work due to the COVID-19 pandemic. Zelinsky, a Connecticut resident and a clear example of the state’s aggressive enforcement, challenged New York’s taxation of his income earned while he worked entirely outside the state during the pandemic. His fight against the application of the convenience rule to his situation underscores the challenges many face under New York’s tax laws.

Our law firm deals with New York State tax law issues, including the complexities of the employer convenience rule, remote work tax implications, and the tax appeal process. Our team of experienced New York State tax attorneys provide comprehensive legal support for navigating these challenging tax disputes.

Whether you’re contending with similar issues as Zelinsky, facing other tax-related challenges in New York, our firm offers the expertise and dedication necessary to fight for your rights.

How We Can Help:

• Expert Legal Representation: Benefit from a team that understands the nuances of NY state tax law and how to challenge unjust tax claims effectively.
• Personalized Strategies: Receive tailored advice and strategies designed to protect your interests and minimize your tax liabilities.
• Comprehensive Support: From initial consultation to representation in tax appeals, we’re with you every step of the way.

Don’t let New York State’s aggressive tax rules overwhelm you. With our seasoned tax attorneys by your side, you have a powerful ally ready to challenge unjust tax claims and fight for your financial well-being. Take the first step towards securing your rights and financial future by contacting us today. Time is of the essence in tax disputes, and early action can be critical to achieving a favorable outcome. Call now to schedule a consultation and learn how we can assist you in fighting against New York’s employer convenience rule and other tax challenges.

*** FACTORS which pertain to the “convenience of the employer” tax rule in New York State ***

 For tax years beginning on or after January 1, 2006, it is the Tax Department’s position that in the case of a taxpayer whose assigned or primary office is in New York State, any normal work day spent at the home office will be treated as a day worked outside the state if the taxpayer’s home office is a bona fide employer office (as determined below). Any day spent at the home office that is not a normal work day would be considered a nonworking day. A normal work day means any day that the taxpayer performed the usual duties of his or her job. For this purpose, responding to occasional phone calls or emails, reading professional journals or being available if needed does not constitute performing the usual duties of his or her job. Factors to apply to determine if a home office is a bona fide employer office Employees should use the factors provided below to assist them in determining if their home office constitutes a bona fide employer office.

The factors are divided into three categories: the primary factor, secondary factors, and other factors. In order for an office to be considered a bona fide employer office, the office must meet either: a) the primary factor, or b) at least 4 of the secondary factors AND 3 of the other factors.

Primary Factor  – The home office contains or is near specialized facilities.

If the employee’s duties require the use of special facilities that cannot be made available at the employer’s place of business, but those facilities are available at or near the employee’s home, then the home office will meet this factor. For example, if the employee’s duties require the use of a test track to test new cars, and a test track is not available at the employer’s offices in New York City, but is available near the employee’s home, then the home office will meet this factor. In the alternative, if the employee’s duties require the use of specialized scientific equipment that is set up at the employee’s home (or at a facility near the employee’s home) but could physically be set up at the employer’s place of business located in New York, then the home office would not meet this factor.

Secondary Factors (AT LEAST 4 MUST APPLY TO YOU)

1) The home office is a requirement or condition of employment. If the employer requires the employee to work from his or her home office as a condition of employment, the home office will meet this factor. For example, if a written employment contract states the employee must work from home to perform specific duties for the employer, then the home office will meet this factor.

2) The employer has a bona fide business purpose for the employee’s home office location. If the employer has a bona fide business purpose for establishing an office in the locale where the employee’s home is located, the home office will meet this factor. For example, if the employee is an engineer working on several projects in his or her home state and it is necessary that the employee have an office near these projects in order to meet project deadlines, then the home office will meet this factor.

3) The employee performs some of the core duties of his or her employment at the home office. If some of the core duties of employment are performed at the home office, then the home office will meet this factor. For example, the core duties of a stock broker include the purchase and sale of stock. Accordingly, if the stock broker executes stock purchases and sales from the home office, this would constitute performing some of the core duties at the home office. However, if the stock broker merely reads business publications on the weekend, this would not constitute performing any core duties at the home office.

4) The employee meets or deals with clients, patients or customers on a regular and continuous basis at the home office. If an important part of the employee’s duties include physically meeting with clients, patients or customers in the normal course of the employer’s trade or business, and those meetings are performed on a regular and continuous basis at the home office, then the home office will meet this factor. For example, the employer has clients located near the employee’s home office and the employee must meet with the clients once a week to perform the duties of his or her job. If the meetings with clients are on a regular and continuous basis at the employee’s home office, then the home office will meet this factor.

5) The employer does not provide the employee with designated office space or other regular work accommodations at one of its regular places of business. If the employer does not provide the employee with designated office space or other regular work accommodations at one of its regular places of business, then the home office will meet this factor. For example, an employer wishes to reduce the size of the office space maintained in New York to decrease rental expenses and, therefore, no longer provides designated office space or other regular work accommodations for one of its employees. Instead, the employer allows the employee to work from the employee’s home. If the employee must come to the office, the employee must use the “visitors” cubicle, conference room, or other available space that is also used by the other employees of the company. In this instance, the home office will meet this factor.

6) Employer reimbursement of expenses for the home office. If the employer reimburses the employee for substantially all of the expenses (e.g., utility expenses, insurance) related to the home office, or the employer pays the employee a fair rental value for the home office space used and the employer furnishes or reimburses the employee for substantially all of the supplies and equipment used by the employee, then the home office will meet this factor. For purposes of this factor, substantially all of the expenses means 80% or more of the expenses.

Other factors (AT LEAST 3 MUST APPLY TO YOU)

1) The employer maintains a separate telephone line and listing for the home office.

2) The employee’s home office address and phone number is listed on the business letterhead and/or business cards of the employer.

3) The employee uses a specific area of the home exclusively to conduct the business of the employer that is separate from the living area. The home office will not meet this factor if the area is used for both business and personal purposes.

4) The employer’s business is selling products at wholesale or retail and the employee keeps an inventory of the products or product samples in the home office for use in the employer’s business.

5) Business records of the employer are stored at the employee’s home office.

6) The home office location has a sign indicating a place of business of the employer.

7) Advertising for the employer shows the employee’s home office as one of the employer’s places of business.

8) The home office is covered by a business insurance policy or by a business rider to the employee’s homeowner insurance policy.

9) The employee is entitled to and actually claims a deduction for home office expenses for federal income tax purposes.

10) The employee is not an officer of the company.

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