The New Jersey Division of Taxation has announced that it will suspend nexus thresholds for employees working from home during the COVID-19 pandemic.
In a March 30 posting on its website, the division said it will temporarily waive the impact of the legal threshold within N.J.S.A. 54:10A-2 and N.J.A.C. 18:7-1.9(a), which establishes nexus for out-of-state corporations with employees working from home in New Jersey.
“In the event that employees are working from home solely as a result of closures due to the coronavirus outbreak and/or the employer’s social distancing policy, no threshold will be considered to have been met,” the division said.
Tax attorneys have raised concerns that telecommuting could potentially trigger nexus exposure for employers with employees who are working from home because of the coronavirus outbreak.
Congress has attempted to address issues of temporary out-of-state workers and differing state income tax and withholding requirements for years. The Mobile Workforce State Income Tax Simplification Act, reintroduced last year, would standardize income tax reporting requirements and exempt workers from filing tax returns in a state if they work in that state for 30 or fewer days a year.