The NY "Convenience of the Employer" Rule

If you work remotely for a New York-based employer but live in another state, you might be surprised to learn that New York may still claim your income for tax purposes. This is due to NY's controversial "convenience of the employer" rule.

How the Rule Works

Under this rule, if you:

Work for a NY-based employer

Work remotely from another state

Your remote work is for your OWN convenience (not required by the employer)

...then NY considers your income as NY-source income and taxes it accordingly.

What "Convenience" Means

NY only exempts your income from state taxes if your remote work arrangement is a necessity for the employer—not just something you prefer.

Examples where you'd still owe NY tax:

You moved to Florida but kept your NYC job

You work from home in Connecticut because you like it

You split time between NJ and NY as you choose

Examples that might be exempt:

Your employer has no NYC office space for you

You were hired specifically to cover a territory in another state

Your employer required remote work (rare to prove)

The Double Taxation Problem

Here's where it gets complicated. Let's say you live in New Jersey but work remotely for an NYC company:

NY wants tax on your income (convenience rule)

NJ also wants tax on your income (you're a resident)

NJ offers a credit for taxes paid to NY, but...

The rates may not match, and you might pay more overall

States with Reciprocity (That Helps)

Some states have reciprocal agreements that can reduce double taxation. Unfortunately, NY does NOT have reciprocity with most neighboring states.

Your State	Impact

New Jersey	Credit available, some double taxation possible

Connecticut	Credit available, some double taxation possible

Pennsylvania	Credit available

Other states	Varies, check specific rules

Recent Legal Challenges

Several states have challenged NY's convenience rule:

New Hampshire sued NY on behalf of its remote workers

Connecticut passed legislation to retaliate

The U.S. Supreme Court declined to hear New Hampshire's case in 2023

For now, the convenience rule remains in effect.

Working Days Analysis

If you split time between NY and another state, NY will tax the portion of income earned while physically in NY (plus any "convenience" days from home).

Example: You work 250 days per year

100 days in NYC office

150 days from home in NJ

Without convenience rule: 100/250 = 40% NY tax

With convenience rule: 100% NY tax (if remote is for convenience)

How to Minimize NY Tax Exposure

1. Document Employer Necessity

If your employer requires you to work remotely (in writing), you may be able to avoid the convenience rule. Get documentation.

2. Allocate Days Carefully

Keep detailed records of where you physically work. Days in NY are always taxable.

3. Request Remote-Required Status

Ask your employer to formally designate your position as remote-required.

4. Consider Relocation Carefully

If you're thinking of moving out of NY for tax savings, understand that your employer's location matters as much as yours.

NYC Residents Who Move Away

If you were a NYC resident and move to another state but keep your NY employer, you face:

Loss of NYC resident tax credit

Still owe NY State tax (convenience rule)

May owe new state's tax (with credit for NY)

The tax savings from leaving NYC may be less than expected.

Key Takeaways

Working remotely doesn't automatically escape NY taxes if your employer is NY-based

Documentation is critical - prove employer necessity if applicable

Credits help but don't eliminate potential double taxation

Consult a multi-state tax professional if this affects you

Calculate Your Taxes

Use our NY tax calculator to estimate your NY tax liability, then consult with a tax professional about your specific multi-state situation.

Remote Work & NY Taxes: The Convenience Rule Explained