Job in WA, working from home in OR

[origun]

Client moved to WA (has no state income tax) in 2019 for job but kept her home in OR (has state income tax). In mid-2020, she was able to work remotely so moved from WA apartment to home in OR for rest of year. She returned to WA occasionally for work-related reasons and maintained WA apartment, vehicle and voter registration. Obviously client would prefer to be WA resident for all of 2020 so I would appreciate any guidance for determining residency for 2020.

And there might be another complication coming up . She would like to be able to sell OR home within the next year or two and not have to pay capital gains. Of course, she would like to be a WA resident for 2020 but if that is acceptable, can those same times count as OR resident for home sale purposes (2 of 5 years) in the future?

[ATSMAN]

Before you give your client any tax advise regarding this matter please look up the tax domicile/residency laws of WA and OR. I get a few questions like this all the time and I always have to double check because most states have a requirement of how many days you spent in the state in addition to owning a residence or renting an apartment. It gets a bit tricky.

Based on your facts, it appears she lived 180 or more days in OR?

[ttbtaxes]

I've never had a client in either state so I can't comment from a depth of experience. These telecommuting rules are all over the map (so to speak) and difficult to understand. In your case, you're adding another dimension by having a second home in a state you are telecommuting. Hodgson Russ has about a good a summary of telecommuting rules as any I have seen. If I were you, I'd have to drill down on Oregon's state tax rules. Looks like a person has to be in Oregon for 200 days to be a statutory resident. That's a weird rule.

Finally, there is information about a nonresident employer and a nonresident employee working in Oregon. This would indicate that the wages earned while in Oregon would be taxable to Oregon. This publication is dated in 2018 so you'd have to look to see if there was more recent guidance for 2020. There is an exception for temporary or transient purposes in ORS § 316.027(B).

https://www.oregon.gov/dor/forms/For...nt_206-692.pdf

https://www.kentandersonlaw.com/2011...-tax-purposes/

https://www.hodgsonruss.com/assets/h...ng_5.22.20.pdf

[AZUKHiker]

Also remember that most states have a base assumption that once you acquire domicile/ residence temporary absences from the state don't count to lose residency of that state. In other words has your client permanently left OR?

[origun]

Client probably exceeded the 200 days in OR (which is stated in Oregon's tax pub 17) although it could be close and records are not good with a bit of coming and going, especially weekends. Intention was to leave OR permanently and to sell house fairly soon; meanwhile a relative has lived in it upon occasion during the owner's absence (no rent). I will check out the 2 sources mentioned by ttbtaxes but have checked Oregon's rules which seem a bit vague and even contradictory. Thanks for the help.

[origun]

After reading the article by Kent Anderson, it seems that this paragraph applies to my client. I appreciate the statutory citations. Let's hope that Covid is "neither permanent nor expected to last indefinitely":

Temporary or Transitory Purpose
An individual who is not domiciled in Oregon, but spends over 200 days in a taxable year in the state, may avoid paying resident income tax if he can prove he is in the state for a temporary or transitory purpose. ORS § 316.027(B). An individual’s stay in Oregon is temporary or transitory if the reason for staying is neither permanent nor expected to last indefinitely. OAR 150-316.027(2).

[Lion]

CA does the Temporary or Transitory Purpose thing, also. Must be a west coast thing.

[Gene V]

Client moved to WA (has no state income tax) in 2019 for job but kept her home in OR (has state income tax

ORIGUN
Did you file Oregon 40-P for 2019 when client moved to Washington? If so, that might help with filing Oregon 40-N this year.

[origun]

Yes, 2019 was a 40-P, moving in the summer of 2019 for a new full-time, presumably permanent job in WA with a different employer. It was a no-brainer at that time as two W-2s, clearly showing income from 2 different jobs and withholding from OR job in first part of year.

[TAXNJ]

I've never had a client in either state so I can't comment from a depth of experience. These telecommuting rules are all over the map (so to speak) and difficult to understand. In your case, you're adding another dimension by having a second home in a state you are telecommuting. Hodgson Russ has about a good a summary of telecommuting rules as any I have seen. If I were you, I'd have to drill down on Oregon's state tax rules. Looks like a person has to be in Oregon for 200 days to be a statutory resident. That's a weird rule..............


https://www.hodgsonruss.com/assets/h...ng_5.22.20.pdf

Good reference