Consultants, travel, income taxes

[Anonymous]

If you work for a large international consulting company out of a specific office in one state (where you are also based) and then work for a client on a project in a different state, do you then pay separate income tax to that state? Even if you are paid by the consulting company and not the client directly? So if over the course of the year you work on 3-4 projects in various states you could potentially have to file 4 income tax returns? I feel like that's not correct.

[Anonymous]

My understanding is you only owe taxes in the state that you reside. I work for a company in NJ but reside in VA and pay VA taxes.

[Anonymous]

No, unless you are issued a W-2 from the company in another state.

[Anonymous]

If you are physically working in those other states, those states will say that you owe tax to them on the money you earn while you are present in that state (and then you claim that tax as a credit on the taxes you owe to your home state).

If your employer withheld taxes for that state, that's why. If your employer did not withhold taxes, and you do not voluntarily file, then it would be up to the state to find you (which some do, using various databases).

[Anonymous]

Anonymous wrote:If you work for a large international consulting company out of a specific office in one state (where you are also based) and then work for a client on a project in a different state, do you then pay separate income tax to that state? Even if you are paid by the consulting company and not the client directly? So if over the course of the year you work on 3-4 projects in various states you could potentially have to file 4 income tax returns? I feel like that's not correct.

I worked several years at a big 4 consulting firm. It wasn't unusual for me to file in 6+ states. The firm grossed up wages to account for tax issues that resulted.

Also worked for a top tier bank that refused to gross up and that insisted it was our problem despite temporarily assigning us to states where tax obligations would be triggered.

[Anonymous]

Anonymous wrote:My understanding is you only owe taxes in the state that you reside. I work for a company in NJ but reside in VA and pay VA taxes.

Different situation.

[Anonymous]

Anonymous wrote:

Anonymous wrote:If you work for a large international consulting company out of a specific office in one state (where you are also based) and then work for a client on a project in a different state, do you then pay separate income tax to that state? Even if you are paid by the consulting company and not the client directly? So if over the course of the year you work on 3-4 projects in various states you could potentially have to file 4 income tax returns? I feel like that's not correct.

I worked several years at a big 4 consulting firm. It wasn't unusual for me to file in 6+ states. The firm grossed up wages to account for tax issues that resulted.

Also worked for a top tier bank that refused to gross up and that insisted it was our problem despite temporarily assigning us to states where tax obligations would be triggered.

Me too. Most states don't trigger the tax obligation until you have worked 30 days in the state. CA triggers it on day 1, as do a couple of others I used to have to include location codes with my time records so that's how the company recorded it.