Taxing Part-Time Remote/Telecommuting associates

Hello All,

We are hoping someone might be able provide assistance/recommendations on how to go about taxing Part-Time Remote/Telecommuting associates. With the current COVID pandemic we as an organization are going to be moving forward with having an increased number of associates working from home/remote Part-Time. With that we are trying to determine how we would go about taxing these associates to their home/remote on the days worked from home/remote and from their work location on the days worked from their work location. Not every associate will be working the same % from home/remote. For those who are going to be working 100% from home/remote, we believe we can use the Remote flag on HR11. We're just not sure how to handle our Part-Time Remote/Telecommuting associates. Any thoughts or assistance would be greatly appreciated.

Thank you,

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chip-bennett

Why would you need to tax them differently? Do you have a state requirement mandating different tax rates based on where work is performed?

unknown

I know in Ohio, we are taxed on the municipality in which we work. I didn't even think about impact of all of this with remote workers now. I'm in IT and not up on payroll tax regulations but interesting to follow this.. Like I personally get taxed for 'city of xxx' but now that I'm working from home which is a village and doesn't have tax... curious how this could alter Ohio taxes

megan-dwyer

I would be interested to see other's ideas on this also. We are right in the NW corner of the state, so we have employees that live in multiple states and we would like to be able to tax them appropriately to their home state when working from home. It will be the same situation that the positions, % worked, days worked, will differ from person to person.

unknown

Sorry for the late response, we would tax them differently because the work is being performed in a different physical location, likely different state.

chip-bennett

We limit our reciprocity to a few boarding states but not all. PA, for instance, is way too complicated so we just don't deal with it.

unknown

Infor recommended creating Locations for each of the Employees home address or address where the employees deems their remote location. This will not be an option for us but could be for someone else.

jarkiewicz-eva

We're also working on how to track remote workers. For the one that will be remote 100% of the time we have things figured out but are looking into how we would track the ones that are working a hybrid of remote/on-site. For us there would be no tax implications but the ask has been to be able to track these in Lawson as well.

Hoping that somebody that has figured out the tax side might be able to shed light on how to set them up to track them even if there is no tax implication for these hybrid employees.

Sylvie Vincenti

Hi... we are also in Ohio and are also required to tax based on where they are work. Nothing is to change taxation-wise right now for those that were sent home to work due to COVID, however once this rule expires and we are having employees permanently stay home afterwards we are required to change their taxation then. So we are trying to figure out now so we are ready for when this happens. We have not been able to figure out how to do it for those that will be partly remote and partly on-site. For those that will be 100% working from home payroll found we can turn the remote flag on located on the tax tab of HR11 and it by-passes the location on the position assigned to the employee and taxes based on where the employee lives instead. What we have not been able to figure out is how to turn that off for specific days if the employee is going on-site to work. Since the remote flag is on the HR11 we can not find anything on the PR35 timerecord that allows for an override of this on that particular day and have it tax based on the the location on the position. If anyone has been able to do this any guidance on how to do it would be appreciated.. We have over 7000 employees so setting up locations for each home address and manually overriding that on time records for those working from home part-time is not manageable.

unknown

I don't think each employee's specific address needs to be listed as a location in Lawson. It might be enough to break out the locations by County and/or City depending on the tax structure. BSI uses the address to determine what tax jurisdictions apply for an employee, but tax locator is notorious for not finding valid street addresses (at least in my experience). So it may be enough to just have the city, county, state populated in the work location for the employee. BSI would utilize those fields to determine liability.

If a street address is needed then 1 thought would be to use to the physical address for the post office that services that city/county.

csmith

We are also in Ohio with over 6000 employees and will have the same problem, but a thought just came to me. We have to process over 250 employees for SERS. Some of these employees work in both a Social Security location and in a SERS location. We have everything set up based on location on their pr13.7. We were struggling with the Social Security taxing. To overcome this we have started using the Process Group field on the PR35. This allows for more than one taxing authority to be applied to a paycheck at a time sending two passes to BSI. I am wondering if this would work for people who work part-time from home. WE use Kronos to automatically apply the process group to the timecard based on the location they are working.

Sylvie Vincenti

Thanks Colleen... I will pass this along to our payroll department to look at. We also use Kronos. I know they were going to look at adding location to Kronos to allow for transferring of locations. However when they tested it out if the Remote flag is set to Y even putting a location that should produce a local tax does not because this flag seems to override all locations on the employee time card to what their home location is set to. Not sure they currently use process group for processing pays.

Sylvie Vincenti

Thanks Tommy... Yes.. I was thinking only 1 location per taxing location, however it would still be difficult to use for the remote part-time staff. We use positions and the location is on the position.so this would require creating a position for every possible location the employee could be working. That in itself with the number of employees we have and their home location would be a nightmare to administer. And I do believe you need the physical address in the location setup for BSI to find the taxing authority.

unknown

I agree trying to maintain all of these locations is going to be a nightmare. However, do not think it will be necessary to build new positions for each location. What are your position rules set on PA06 for location? Is location set as a defaulting field? Location could be set as a default-override. The employee's record on HR11 could have the location set to match their physical remote location for that position. So you could have 10 employees each with a different location all in the same position.

If you need to record when the employee is working remote and when they are on-site then you could possibly use the multiple positions feature in Lawson. We do not utilize multiple positions, but I have read about it in the documentation. The on-site position could be their primary position POS-LEVEL 1. Then setup a similar position, but designate it as remote. Assign this position as the employee's 2nd position on their record. This might assist in getting around the taxing issues as well depending on the employee's location as bsi would look at the location record for the position and assess the liabilities against that particular location.

Hope this helps.

unknown

How would you designate a 2nd position as remote?

unknown

Instead of creating a Location for each County, City, School, etc. What about creating a Location for the State? From what I'm told from our Payroll team, Local taxes are taken based on the employees physical residence regardless of where they physically work. Creating a "State" Location and using that location for the Remote work days will create State withholding's. Thoughts?

unknown

Hi Bobby, I know there are local taxes where Lawson/BSI looks at the work location, not just the employees' residence (example - Kansas City local). Have you tried contacting your state dept of revenue and the DORs of the states you need to deal with, to see if they've been talking to each other at all, or have come up with any guidance? I would start there before building out any new structures in Lawson.

unknown

I provided some test examples with our "State" Location and Infor's response was "That looks good and seems to be working." That answer isn't leaving me feeling like this is the plan, so I'm looking for any holes.

Employee lives in PA and works in DE

Created a PR80 with all hours in the default Work Location in DE.

Performed Calc; for Deductions I am seeing withholding's for DE state and PA locals. PA state shows as Taxable but no amount is withheld.

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Created Location "PA" and used PA State Capital for address

Created a PR80 with 2 records; 1st record defaulted to employees Work Location in DE and 2nd record changed the Location to PA

Performed Calc; I'm seeing PA locals withheld and PA & DE state withheld.

Could this work?

unknown

My hat is off to you with that testing regimen.

The only issue I can see is if the state capital has a city income tax. If that were the case then the employee may be on the hook for the city income tax even though they are not a resident of that city.

Otherwise I think that plan seems fairly solid. Hope it works out.

unknown

When you say that you have begun using the Process Group on the PR35, where are you seeing that?

unknown

We are located in Ohio, have 12,000 employees, and use API as our time and attendance system. We are also struggling to find a way to handle the hybrid remote worker who will work both at home and in the office. There will be both salaried and hourly workers in this hybrid situation. We are using the remote flag on HR11 for some employees that are 100% remote and that works well. If anyone is using API and have found a way to handle the hybrid remote worker, we would appreciate some input. Thanks for your help.

unknown

Hi Donna Jennings

We are just started to figure out the hyrbrid remotes as well. We also have API. Before we start going down the rabbit hole, have you figured anything out you would be willing to share? if you would like to email me direct, that's fine too.. aschultice@genesishcs.org

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