Connecticut

New Jersey is pushing local telecommuters who work for New York companies to appeal their Empire State tax bills

Published

8 months ago

April 24, 2024

New Jersey is pushing local telecommuters who work for New York companies to appeal their Empire State tax bills

Telecommuting, a pandemic-era novelty that has become a permanent alternative for many people, has some Connecticut and New Jersey employees of New York-based companies questioning why they still have to pay personal income tax to the Empire State.

Their home states are wondering as well.

Fed up with losing out on hundreds of millions of dollars in tax revenue each year, New Jersey is now offering a state tax credit to residents who work from home and successfully appeal their New York tax assessment. Connecticut is considering a similar measure.

The Garden State’s bounty — a rebate worth roughly half a person’s refund of income taxes they paid to New York for the 2020-2023 period — has been claimed so far by one winning litigant since the state made the offer in July, according to the state’s Division of Taxation. That taxpayer received a $7,797.02 refund for their efforts. Officials hope that person’s windfall will encourage others to follow suit.

Another New Jersey resident who is taking up the state’s offer is Open Weaver Banks, a tax attorney who prefers working from home to braving an “awful” commute into the Big Apple. She’s also filed one of a growing number of similar challenges.

“The process of doing the refund and the appeal isn’t all that intimidating to me,” said Banks, a tax partner at Hodgson Russ LLP. “I’m on New Jersey’s team here. I would like to see more residents doing this. I think they have a really fair point.”

New York requires out-of-state commuters who work for New York-based companies to pay New York income taxes, even if they’ve stopped physically going in to the office most days a week, unless they can satisfy very strict requirements for what constitutes a bona fide home office.

A home office near a specialized track to test new cars, for example, might qualify if it couldn’t be replicated in New York. But a worker with specialized scientific equipment set up in their home that could be duplicated over the border would still have to pay, according to a memorandum from the New York State Department of Taxation.

When the nature of work was upended in 2020, New York should have “softened” these requirements, Banks said. “And they didn’t. They are just standing by and fighting the claims.”

Both neighboring states have implemented “retaliatory” tax rules that affect New Yorkers who work remotely for Connecticut or New Jersey-based companies, but these workforces are far smaller and their overall tax payments don’t make up the difference.

Out-of-state taxpayers paid New York nearly $8.8 billion in 2021 in taxes, roughly 15% of the state’s total income tax revenues, according to the Citizens Budget Commission in New York. Of that, $4.3 billion came from New Jersey taxpayers and $1.5 billion from Connecticut taxpayers.

It’s unclear how much of that was earned at home. But out-of-state employees of New York-based companies who work remotely are increasingly appealing their tax bills, Amanda Hiller, the acting commissioner and general counsel for the New York Department of Taxation and Finance, told state legislators recently.

Hiller acknowledged that New York’s decades-old policy, known as a “convenience of the employer rule,” has created a financial burden for New Jersey and Connecticut, which provide tax credits to their residents for the income taxes they’ve paid New York so they are not double-taxed.

New Jersey’s Division of Taxation said the state’s long-term goal is to have New York’s rule overturned entirely, something that will likely require a taxpayer’s legal challenge to succeed before the U.S. Supreme Court. That could be a tall order: New Hampshire tried to sue Massachusetts for temporarily collecting income tax from roughly 80,000 of its residents who worked from home during the pandemic, and the Supreme Court rejected the complaint without comment.

Officials in New Jersey estimate it could reap as much as $1.2 billion annually if residents working from home for New York companies are taxed at home. Connecticut could recoup about $200 million, its officials say.

Connecticut Gov. Ned Lamont has proposed an initiative similar to New Jersey’s that needs final legislative approval. It’s unclear, however, whether it can pass before the session ends May 8.

“We think it’s an unconstitutional overreach by the state of New York,” Jeffrey Beckham, secretary of Connecticut’s state budget office, said recently. “We think our residents should paying tax to us and they’d be paying at a lower rate.”

Indeed, the top marginal state income tax rate, as of Jan. 1, for individuals in New York is 10.90%. Connecticut’s top rate is 6.99% and New Jersey’s is 10.75%, according to the Tax Foundation.

“An awful lot of people are hurt by these laws,” said Edward Zelinsky, a Connecticut resident, tax law expert and professor at Yeshiva University’s Cardozo School of Law in New York City. “While New York and other states like to pretend that these are wealthy people, the people who are most hurt by this rule are often people of modest income, middle income, people who can’t afford lawyers.”

Zelinksy has been trying, so far without success, to challenge New York’s tax rule for about 20 years, including a pending case over the income he earned working from home while his school was closed due to COVID-19 restrictions.

A small number of states, including Arkansas, Delaware, Nebraska and Pennsylvania, have tax rules similar to New York’s. New Jersey and Pennsylvania have a reciprocal income tax agreement.

Andrew Sidamon-Eristoff, who is in the unique position of being the former New Jersey state treasurer and a former New York commissioner of taxation and finance, believes eventually the right litigant will “get it before the right court to challenge it.”

But former New Jersey state Sen. Steven Oroho, an accountant who commuted for nearly two decades into New York City and who pushed as a legislator to address the inequity, said he’s skeptical of New Jersey’s commitment to the effort, which puts the financial onus of a potentially lengthy and expensive legal challenge on the individual taxpayer.

“New York is very, very aggressive and unfortunately, in my view,” said Oroho, “New Jersey has been extremely passive.”

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Connecticut

Firefighter Dies After Being Struck By Vehicle, ID Released: CT News

Published

7 hours ago

December 19, 2024

Press Room

Firefighter Dies After Being Struck By Vehicle, ID Released: CT News

Patch AM CT brings you the breaking and trending news stories from all across Connecticut each weekday morning. At any point, you can find your local Patch and catch up on those stories here.

The ID of the firefighter killed in the crash has been released by authorities.>>>Read More.

The fatal crash is under investigation.>>>Read More.

The driver was found walking on a road, according to a report.>>>Read More.

The vehicle was parked in the customer parking lot with several other vehicles in close proximity, officials said.>>>Read More.

See also:

Patch asked readers in Connecticut to send in photos of their favorite neighborhood displays, and you did not disappoint.>>>Read More.

A meal at a local restaurant is one of the best you can get in America, according to a new list from The New York Times.>>>Read More.

Saturday, the Winter Solstice, may be the shortest day of the year, but you’ll still find plenty to do in Connecticut, all weekend long.>>>Read More.

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Connecticut

End the corruption and mismanagement in CT's state colleges

Published

14 hours ago

December 19, 2024

Press Room

End the corruption and mismanagement in CT's state colleges

Connecticut students, educators, and taxpayers deserve better than the broken status quo at our Connecticut State Colleges and Universities (CSCU).

A pattern of entitlement among unaccountable administrators, wasteful spending, and mismanagement have led to the prospect of disastrous cutbacks for students and faculty. Where is the Board of Regents for Higher Education (BOR), the entity tasked with oversight of the CSCU system? Why did it take years of inaction for Gov. Ned Lamont to finally call for an outside audit of the CSCU system and its chancellor Terrence Cheng? How can we know taxpayer funds aren’t continuing to be misused?

Heather Somers Credit: Heather Somers.com

Getting answers for taxpayers, implementing concrete reforms, including real oversight, and holding those responsible accountable must be a priority for the legislature in the upcoming legislative session starting in January.

For years, those tasked with oversight of this unaccountable body, especially the Board of Regents, have sat idly by while Cheng was treated to cushy perks and treated taxpayer dollars meant for education like a personal piggy bank.

In addition to Cheng’s generous salary of $403,000, his compensation also includes a brand-new car and a separate $25,000 “housing and entertainment” allowance. Cheng has continued to live primarily in New York and makes a 90-minute commute to Hartford. That alone should not be problematic, many Connecticut residents commute to New York and vice versa.

But unlike those thousands of hardworking Connecticut citizens, Cheng used state college system funds to pay a chauffeur to drive him on his commute. And that’s just the tip of the iceberg. Reporters have uncovered a pattern of skirting spending rules and reporting requirements — from misusing his state car, frequently blowing past a $50 per-person cap with expensive meals, charging alcohol to his expense account, and keeping insufficient records.

The complete abdication of responsibility for those charged with overseeing the state college system is even more unacceptable now that educators and students face significant budget cuts – a direct consequence of years of tolerance for mismanagement and waste.

The National Center for Higher Education Management Systems found in a recently released report that CSCU, “has consistently fallen short in addressing its dire fiscal situation, suggesting sweeping reforms in order for the system’s long-term sustainability.”

This is on top of tuition increases in recent years. Chancellor Cheng and his complicit Board of Regents recently approved a 5% tuition price hike for students, the recipients of the bill for their inaction and failure.

The complete lack of accountability within the CSCU system goes deeper than fiscal management. Other reports have revealed that state college administrators spent time and resources looking for loopholes to let them extend grants, internships, and paid opportunities to illegal immigrants without disclosing their citizen status. While hardworking Connecticut citizens are being squeezed by inflation and one of the highest tax burdens in the nation, unaccountable administrators were trying to turn education dollars into new taxpayer-funded benefits for illegal immigrants.

The Board of Regents has been either incompetent, inattentive, or both. They have not acted nearly swiftly enough or aggressively enough to bring scrutiny and accountability to the CSCU system.

For this reason, the Board of Regents itself may need to be audited — in addition to the legislature exercising full accountability for the CSCU system itself in the upcoming session.

We must know how those tasked with overseeing our state colleges and approving tuition increases are allocating resources and making budgetary and management decisions. And we must know why it took so long, and ultimately for others to start asking questions, for the out-of-control situation to come to light. The legislature should consider whether structural reforms need to be made at a higher level — to how an unaccountable body of political appointees are left to oversee such an important institution of education in our state.

The misuse of taxpayer funds and ideologically charged behavior of those tasked with working for the taxpayers follows a pattern I’ve worked to expose and reform across various quasi-public boards and government agencies.

When I realized the Board of Pardons and Paroles was engaged in a reckless spree of commutations that included a number of violent criminals, I led the charge to expose them that forced the governor to replace the board chair. Now I’m leading the push to structurally reform the parole board to uphold public safety and protect victims.

Before that, I led the crackdown on mismanagement at the Port Authority. I demanded a public hearing to disinfect the mess with sunlight and wrote legislation to strengthen the independent watchdog office that reviews and vets contracts. I also helped expose abuse at Whiting Forensic Hospital and corruption at the Connecticut Municipal Electric Energy Cooperative (CMEEC), resulting in jail time for those responsible.

Real reform is always achievable. But it requires relentless leadership that cuts through the noise to deliver results and put our citizens and taxpayers before business as usual in Hartford.

As I have in the past, I will be ready to hold Hartford accountable to taxpayers. This time, to work with my fellow legislators, educators, students, and others to ensure taxpayer funds meant for educating the next generation are spent for that purpose, not lavish perks for unaccountable administrators or ideological pet projects.

Heather Somers represents the 18th District of Connecticut in the State Senate.

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Connecticut

Video shows plane wreck near Connecticut, not New Jersey drone crash | Fact check

Published

22 hours ago

December 18, 2024

Press Room

Video shows plane wreck near Connecticut, not New Jersey drone crash | Fact check

The claim: Video shows drone crash in New Jersey

A Dec. 16 Facebook reel (direct link, archive link) includes a video of emergency vehicles surrounding what appears to be an aircraft resting on a guardrail on the side of a highway.

“Drone Crashes!” reads the post’s caption, which includes the hashtags #newjersey and #ufo.

The post was shared more than 1,000 in two days. The footage and a similar claim were also shared on Instagram.

More from the Fact-Check Team: How we pick and research claims | Email newsletter | Facebook page

Our rating: False

The video does not show a drone crash. The footage is from a Dec. 12 plane crash near the border of New York and Connecticut, according to media reports.

Video shows aftermath of plane crash near New York

A deluge of reports of drones flying unusually in the northeastern U.S. began circulating in mid-November, with more than 5,000 sightings reported as of Dec. 17. The sightings have sparked concerns about national security and airspace safety, but federal authorities have said there is no public safety risk.

The video shared on Facebook, however, does not show a crashed drone. Rather, it shows a small plane that crashed along Interstate 684 in Westchester County, New York, on Dec. 12, killing one person and injuring another, according to various news outlets. Footage and images from the scene match the scene shown in the Facebook video, showing the same small white plane in the same position on the side of the highway.

Fact check: No, that’s not a crashed drone. It’s a TIE fighter replica

A Federal Aviation Administration report about the incident said the pilot reported engine issues before the crash.

The New York State Police posted about the crash on X, alerting drivers to traffic closures on Interstate 684. New York Gov. Kathy Hochul also issued a statement about the accident on Dec. 12, which confirmed one person died and another was injured.

White Plains is about 100 miles north of New Jersey, where the Facebook video claimed the crash happened and where witnesses have been reporting supposed drone sightings since mid-November.

USA TODAY reached out to the user who posted the Facebook video but did not immediately receive a response.

Lead Stories and PolitiFact also fact-checked the video

Our fact-check sources

FAA, Dec. 12, FAA Statements on Aviation Accidents and Incidents
FAA, Dec. 13, FAA Accident and Incident Notification(s): Notice(s) Created 13-DEC-24
New York Gov. Kathy Hochul, Dec. 12, Statement from Governor Kathy Hochul
New York State Police, Dec. 12, X post
Connecticut State Police, Dec. 13, Troopers Assist National Transportation Safety Board with Aircraft Accident on I-684 in Greenwich
CBS News, Dec. 13, One dead in small plane crash along I-684 in New York’s Westchester County

Thank you for supporting our journalism. You can subscribe to our print edition, ad-free app or e-newspaper here.

USA TODAY is a verified signatory of the International Fact-Checking Network, which requires a demonstrated commitment to nonpartisanship, fairness and transparency. Our fact-check work is supported in part by a grant from Meta.

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