Convenience-of-the-Employer Rules by State: Who Can Tax Your Work-From-Home Days

Updated August 7, 2026. Quick answer: six jurisdictions apply some form of a convenience-of-the-employer rule — Connecticut, Delaware, Nebraska, New Jersey, New York and Pennsylvania. Where it applies, days you work at home in your own state can still be taxed by your employer’s state, so the same income can be reached by two states at once. But “six” is already an approximation: Connecticut’s rule only bites if your home state uses a similar test, and New Jersey’s does not apply to Pennsylvania residents at all because the two states have a reciprocal agreement. All 51 jurisdictions are listed, including the 45 that do not apply it.

What the rule actually does

The ordinary rule is that a nonresident is taxed by a state on the days worked in that state. A convenience rule inverts that for remote days. If you work from home because you prefer to rather than because the job requires it, the employer’s state treats those days as worked there anyway.

The consequence is the one to plan around: your home state taxes you as a resident on all your income, and the employer’s state taxes the same days as sourced to it. A resident credit usually relieves most of the double tax — usually is not always, and it depends on your own state’s credit rules, which is why this is worth checking before you agree to a remote arrangement rather than at filing time.

Not all six rest on the same kind of law — and that matters

This is the distinction no published version of this table makes, and it changes how much weight a reader should give the rule.

• Statute (Connecticut, Delaware, New Jersey). The rule is in the tax code. Connecticut’s is Conn. Gen. Stat. § 12-711(b)(2)(C); New Jersey’s was enacted by P.L. 2023, c. 125 and applies retroactively to 1 January 2023.
• Regulation (Nebraska, Pennsylvania). Nebraska’s rule is not in its income-tax statutes at all — it rests entirely on a Department of Revenue regulation, which is a weaker footing than a statute for anyone weighing exposure.
• Regulation plus department guidance (New York) — and New York is the one most people actually face. The regulation at 20 NYCRR 132.18(a) sets the necessity test, but the factor test that decides nearly every real case is a departmental memorandum, TSB-M-06(5)I. The Department has changed that position once already, describing a “revised application of the convenience of the employer test”. A rule that can be revised by memorandum is a different kind of risk from one written into a statute.

The two conditions that shrink the list

Connecticut’s rule is conditional. A nonresident includes income from days worked outside Connecticut for their own convenience only if the state they live in itself uses a similar test. So Connecticut’s rule reaches you or does not depending on a law in a different state entirely — which is why a flat count of six overstates the practical position for most people.

New Jersey and Pennsylvania have a reciprocal agreement, and New Jersey’s own Division of Taxation confirms that its convenience rule does not apply to Pennsylvania residents because of it. Two of the six states cancel each other out for the commuters most likely to be affected.

The table: all 51 jurisdictions

The 45 that do not apply it — and why we split them

CONFIRMED ABSENT (39): Alabama, Alaska, Arizona, Arkansas, California, Colorado, District of Columbia, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Kansas, Louisiana, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nevada, New Hampshire, New Mexico, North Carolina, North Dakota, Ohio, Oregon, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Vermont, Virginia, Washington, West Virginia, Wisconsin, Wyoming. The source that would carry the rule was read and does not carry it.

NOT FOUND (6): Iowa, Kentucky, Maine, Maryland, Oklahoma, Utah. The search was incomplete or a source was unreachable, so a rule may exist, and these are not publishable as a negative. We are not publishing them as one.

Every published version of this table lists only the states that have the rule, which cannot answer the question a reader has — does this reach me? — and implies the other 45 were never checked. They were, and the six we are least sure about are named.

Sources and limits

Each row carries its citation, its authority tier, its source type and the date it was read. Two limits stated plainly: Pennsylvania’s inclusion rests on the necessity clause in 61 Pa. Code § 109.8 together with New Jersey’s official identification of it — Pennsylvania Department of Revenue guidance was not read directly. And reciprocity agreements were not systematically verified: only the New Jersey–Pennsylvania agreement is confirmed here, from New Jersey’s own page. Where a row records no reciprocity that means none was confirmed, not that none exists.

This describes state sourcing rules, not your total liability — resident credits, part-year residency and any agreement between your two states all change the answer. General information, not tax advice, and a two-state remote arrangement is one of the situations where an hour with a preparer who handles both states is worth the fee.

Free to reuse under CC BY 4.0 with a link.

Suggested citation: “Convenience-of-the-employer rules by state,” Clear Money Guide, 2026, clearmoneyguide.com/remote-work-convenience-rule-by-state/.