With COVID-19 forcing stay-at-home orders in many states, companies have allowed their employees to telecommute from their home offices. Under normal telecommuting circumstances, business entities are required to file taxes when they have established nexus, a direct or representational presence within a particular state or jurisdiction. In most cases, payroll withholding taxes are based on the state in which the employee performs their work.
As the pandemic continues, more states are likely to issue guidance in the coming weeks on nexus requirements and telecommuting. Companies are advised to check for tax updates for the states in which they operate or where their employees reside.
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