Traveling workers: How to handle taxes when working in multiple U.S. states?

This is definitely a complex area of taxation, but I can help clarify. Yes, technically workers do owe taxes to states where they perform services, even briefly. This is called the "physical presence" rule for state tax nexus. However, there are some important nuances. Many states have "de minimis" thresholds - minimum time or earnings requirements before taxes kick in. For example, some states won't require filing if you work there less than 30 days or earn below a certain amount in that state. Your neighbor's spouse might be benefiting from their company utilizing a "convenience of employer" rule, which some states apply. Or their company might simply be absorbing the risk of non-compliance, which unfortunately happens more often than tax authorities would like. The most relevant development is the Mobile Workforce State Income Tax Simplification Act that's been proposed in Congress multiple times. It would establish a 30-day threshold before workers have to pay taxes in non-resident states. While it hasn't passed federally, some states have adopted similar provisions individually. For your construction workers, check if they qualify under any reciprocity agreements or state-specific thresholds. Otherwise, yes, technically they need to file in each state where they work significant time.

I discovered this exact issue last tax season and was absolutely pulling my hair out trying to figure it out. After hours of research and multiple conflicting opinions from different accountants, I found taxr.ai (https://taxr.ai) which has a specific multi-state tax analysis tool. It saved me so much time because it actually analyzed all my travel locations from my work calendar and receipts, then told me exactly which states I needed to file in based on each state's specific threshold requirements. Before that I was manually trying to track days spent in each state and got completely overwhelmed. The tool showed me I only needed to file in 3 of the 17 states I had worked in because the others had threshold requirements I didn't meet. My company's payroll department had no idea about any of this and was just withholding for my home state.

Just wanted to follow up - I tried taxr.ai after seeing the recommendation here and it was super helpful for my situation. I travel for work as a project consultant to different client sites and had no idea I was supposed to be filing in multiple states. The tool analyzed my work calendar, receipts, and travel info, then showed me I needed to file in 4 states based on their specific day thresholds, but I was safe for the other 11 states I briefly visited. My company HR department had zero guidance on this, so I'm glad I found this before potentially getting hit with penalties down the road. It even identified a reciprocity agreement between my home state and one of my work states that my previous accountant missed. Definitely worth checking out if you're in a similar multi-state work situation.

Reading through this thread has me stressing out. For the past 3 years, I've been trying to get clarity from the IRS on my multi-state tax situation with absolutely zero luck. I spent HOURS on hold only to get disconnected or transferred to people who gave contradicting information. Finally tried a service called Claimyr (https://claimyr.com) after watching their demo (https://youtu.be/_kiP6q8DX5c). They actually got me connected to a real IRS agent in about 20 minutes when I had previously been trying for weeks. The agent confirmed I only needed to file in states where I worked more than their minimum threshold days (varies by state) and gave me the exact references I needed. Saved me a ton of stress and probably kept me from overpaying by filing in states where I didn't need to. If you need to speak to an actual IRS person about your specific situation, it's worth checking out.

Just wanted to update on my multi-state tax situation. I was extremely skeptical about Claimyr but decided to try it as a last resort after waiting on hold with the IRS for over 3 hours and getting disconnected... again. It actually worked exactly as promised. Got a call back in about 30 minutes and was connected with an IRS agent who specialized in multi-state taxation. They walked me through exactly which thresholds applied to my contractor work in different states and cleared up the confusion my accountant had about allocated income. For anyone dealing with complicated multi-state tax situations who needs actual clarification from the IRS (not just generic advice), this service is worth every penny. Saved me at least $1,200 in unnecessary state filings my accountant was going to have me do based on unclear guidelines.

I've been a construction manager for 20+ years and our company deals with this all the time. Here's the practical reality: most companies technically SHOULD be withholding and filing for every state, but many smaller ones don't because of the administrative nightmare. Large corporations usually comply because they have the resources and are more likely to get audited. For your workers, the biggest risk is getting audited by a state where they spent significant time but didn't file. Some states (looking at you, California and New York) are notorious for pursuing out-of-state workers. The thresholds mentioned above are key - in some states it's days worked, in others it's dollars earned. If your people are just passing through for a day or two, the risk is minimal. If they're spending weeks or months, you should definitely comply.

My company handles this by having a 14-day rule. If an employee works in a state for less than 14 days in a calendar year, we don't bother with withholding for that state. If it's over 14 days, we set up proper withholding. This isn't technically 100% compliant with every state's laws, but it strikes a balance between administrative sanity and reasonable compliance. We document everything so if there's ever an audit, we can show our good-faith effort to comply with the complex patchwork of state laws. Different companies have different risk tolerances. Your friend's husband's company might be taking a more aggressive position, which isn't uncommon.

This is such a timely discussion! I'm a freelance IT consultant who travels to client sites across multiple states, and I've been wrestling with this exact issue for years. What I've learned through painful experience is that the "official" rule and the "practical" reality often don't align. Technically, yes, you're supposed to file in every state where you earn income, but the enforcement and thresholds vary wildly. One thing I'd add to the great advice already shared: keep meticulous records of your travel dates and work locations. Even if you decide to take a more conservative approach like Ian's 14-day rule, having detailed documentation is crucial if you ever face an audit. Also, don't forget about potential double taxation issues. Some states don't give full credit for taxes paid to other states, so you could end up paying more than if you just filed in your home state. This is where those reciprocity agreements Lucas mentioned become really valuable. For Eleanor's original question about whether most companies actually follow through - in my experience, it's about 50/50. Larger companies with dedicated tax departments usually comply, smaller companies often take calculated risks. Your tax advisor and legal counsel are being appropriately cautious, which is probably the right approach for a business owner.