ST. LOUIS — With tax deadlines approaching, accountants at Brown Smith Wallace have advice for employers and employees after a year of working from home.
According to a recent poll conducted by the American Institute of Certified Public Accountants and The Harris Poll, 55% of Americans who have worked remotely during the pandemic are not aware of the possible tax consequences. Rob Haggerty, a tax partner and real estate industry group leader at Brown Smith Wallace, outlined some of them:
• The individual tax filing deadline has been extended to May 17, but other key deadlines are still April 15. The deadlines for first-quarter estimates, trust, gift and C Corp returns did not get extended and are still due April 15.
• The COVID-19 pandemic has forced many employees to work from home, and not surprisingly, there are tax considerations for the employer and the employee. For example, tax return considerations in 2020 include withholding tax for employers and income tax reporting for the employee. They can be challenging when employees are working remotely and dealing with multiple states, that is, employer state, employee’s resident state, employee’s work state.
- For employees, unintentional residency in a nonresident state is another consideration. This can occur if an individual spends more than 183 days in a nonresident state, resulting in unexpected tax consequences.
- For employers, potential income, franchise, gross receipts, sales and use tax pitfalls may arise. Businesses should evaluate prior risk before filing in a new state.
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