Work at Home Nexus issue

[Snaggletooth]

Just to spice this up, let's pick two state taxing authorities that absolutely hate each other.

Shut-in lives in Colesville, NJ in the Catskill Mountains. His employer is in Port Jervis, NY, an easy drive over the High Point ridge. However, he works at home. His employer furnishes him a WAN link with "anywhere" software, where he can tap into the Port Jervis system and work just like he were working at his employer's headquarters in a next door office. Shut-in owns his own PC and peripheral equipment. Employer is furnishing only the communication link.

1) For state income tax purposes, is he receiving NY wages or NJ wages? Please answer without getting hung up on filing requirements for either or both states, reciprocity agreements, lack thereof, or a host of other issues, or whether this arrangement could have been planned better. The question is simply, "Which state can claim the wages as source?"
2) Would the answer be the same if he were required to drive to Port Jervis one day every month?

Thanks! Ron J.

[Beth]

I would say his tax home is his home, and thus NJ claims the wages.

[Taxref]

Both states will claim the wages. The recent NY court case involving the tele-commuter living in TN pretty much established that for NY. NJ taxes all income for residents, but would allow a credit for most of the state tax paid to NY.