CT State Lawmakers want an income tax credit for remote workers – NY and MA push double taxation

Politics

HARTFORD, Conn. (WTNH) — A big question being tackled by state lawmakers: Who do Connecticut residents pay income tax to if they work from home during the pandemic?

Chris Barnes lives in Tolland but pre-pandemic worked in Massachusetts as a chief product officer for Escalent.

“I haven’t stepped foot in the Cambridge office since March 11, [2020],” said Barnes.

His home office in Tolland has been his workspace. He no longer travels to Massachusetts three times a week.

Barnes said, “I estimated that I’ve missed about 30 flights since last March when the pandemic began. Now I’m an in-home office, doing Zoom calls, trying to stay connected with my team.”

Pre-pandemic the “schedule 2” box on tax paperwork based the tax on the amount of time worked in each state. This year, governors of New York and Massachusetts want to be paid in full. Plus, employees would be taxed in the state where they work remotely.

State Representative Sean Scanlon, the Democratic chair of the Finance Committee says, “We have to make a decision to defend them or collect that revenue. We have made a decision to defend them and make sure they are not double taxed.”

Double taxation could affect 110,000 Connecticut residents who work in New York and Massachusetts where tax rates are even higher. Lawmakers are trying to pass legislation giving CT residents a credit – so they aren’t being taxed twice. It would mean losing $500-million dollars in new revenue to CT.

State Rep. Scanlon explains, “We’re talking about secretaries, people who commute Enfield into Massachusetts, Danbury into Poughkeepsie. These are middle-class people who are under attack from the states of New York and Massachusetts and we want to make sure we have their backs.”

A mom-of-two and a professor of social work at Yeshiva University, Dr. Shannon Lane says, “anything to help working families.”

Lane adds the double taxation question also deserves a long term solution.

“Now that you can work remotely in California, but live in CT – I do think it’s changed the landscape more and more,” said Lane.

A dozen states including CT have signed on to a federal lawsuit regarding double taxation. It’s pending at the U.S. Supreme Court.

Chris Barnes admits giving employers and employees clarity on a complex issue is helpful.

“I’ve got a very young team. Anything they can save in this economy – we don’t know at this point what’s next in terms of the economy – is really important,” said Barnes.

Lawmakers are trying to fast-track this legislation before people have to file their taxes. They also suggest you talk to your accountant.

In Barnes’s case, that’s his wife.

“You and your wife will have to go to dinner and talk schedule twos,” suggested News 8 Chief Political Correspondent Jodi Latina.

“Or in this case – I’ll wait to be told what to do,” laughed Barnes.

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