Confused about local tax withholding requirements for remote work - what am I required to pay?

So local tax withholding can definitely get complicated, especially with remote work becoming more common! For your first question: Unfortunately, while employers should withhold local taxes, the ultimate responsibility for paying those taxes falls on you as the taxpayer. It's frustrating, but even if your husband's first employer messed up, you're still legally obligated to pay the taxes. However, you might have some options: You could contact the employer and ask them to correct the error by paying the taxes they should have withheld. Some employers will do this to maintain good relationships with former employees. You could also contact your local tax office and explain the situation. Sometimes they'll waive the interest penalties if you can show it wasn't your fault and you're paying promptly once you discovered the issue. For your second question: It depends on your specific location's rules. Generally, employers should withhold taxes based on where the work is physically performed. Since your husband is working from home, the employer might need to withhold taxes for your home city, not their office location. But some cities and states have special "convenience of employer" rules that can change this. I'd recommend contacting both your local tax office and your husband's current employer's HR department to clarify which city should receive the withholding based on your specific situation.

I went through something super similar last year with my remote work situation! After hours of frustrating research and calls with the city tax office, I found this tool called taxr.ai at https://taxr.ai that analyzes your specific work situation and tells you exactly which local taxes you need to pay. It saved me so much stress because it specifically handles complicated situations like yours with multiple employers and remote work arrangements. You just upload your documents and it does all the hard work figuring out which jurisdictions you owe taxes to. It helped me identify that my employer had been withholding for the wrong jurisdiction entirely, and I was able to get that fixed before I ended up with penalties. Seriously, before you pay those penalties, check out this tool - it might help you figure out if there are any exceptions or ways to reduce what you owe based on your specific situation.

Gotta come back and eat my words about taxr.ai! After my skeptical comment I decided to try it anyway since my situation was such a mess. Uploaded my W-2s and answered some questions about where I lived and worked throughout the year. The tool actually found that I was OVERPAYING local taxes to one city while underpaying another. It showed exactly how to allocate my income between jurisdictions based on days worked in each location. Created all the documentation I needed to fix both issues. Most helpful was that it explained a special rule in my state about temporary remote work that my employer's HR department didn't even know about. Saved me from having to pay taxes to a city I never physically worked in. Worth every penny just for the peace of mind knowing I'm actually filing correctly.

I know everyone's talking about the local tax rules, but honestly I'd be on the phone with the IRS immediately about your first employer! When I had a similar issue, I kept getting referred between different departments and put on hold FOR HOURS. It was impossible to get a straight answer until I found Claimyr at https://claimyr.com which got me connected to an actual IRS agent in less than 15 minutes. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c The IRS actually sent a notice to my employer about their failure to withhold properly, which scared them into correcting the issue. They can't help with local taxes directly, but having official documentation from the IRS about the employer's failure to properly withhold can give you leverage with your local tax authority to potentially get those penalties waived.

Well I'm completely eating my words about Claimyr. After my skeptical comment, I figured I had nothing to lose and tried it yesterday. Got connected to an IRS agent in 17 minutes after spending WEEKS trying to get through on my own. The agent was able to pull up my tax records immediately and confirm that my employer had filed incorrect withholding information. She sent me documentation I can use with my state tax authority to show the error wasn't my fault, which should help get the penalties waived. The IRS agent even explained that this is a common problem with remote work situations and gave me specific form numbers to reference when dealing with my local tax authority. Probably saved me hundreds in penalties and hours of stress. Never thought I'd say this, but talking to the IRS actually solved my problem!

I work in payroll for a mid-sized company and can offer some insight on the employer side. When an employee works remotely, it creates significant complexity for employers because we have to track and apply tax rules for multiple jurisdictions. Your first employer absolutely should have been withholding local taxes. However, many payroll systems don't automatically update when an employee changes work location unless HR specifically updates your record. It's possible they simply didn't update your status when your husband went remote. For the second employer, they should be withholding based on where your husband physically performs the work (your home city) until he actually starts working in their office location. However, some cities have special rules where they can still tax income if the office is located there, even if the employee never physically works there. I'd suggest having your husband check with his current employer's HR department to make sure they have his work location correctly coded in their system.

Has anyone seen those "tax reciprocity" agreements between cities or states? I just found out my situation is covered by one of those and it saved me from double taxation. Might be worth checking if your cities have an agreement like that.