Taxation with duplication

Even though many legal barriers to teleworking have been eliminated over the past couple of decades, some of them persist. A particularly insidious barrier only applies to cross-state-border teleworkers. Since most teleworkers, even today, are telecommuters—living within commuting distance of their employer’s offices—this has not been a problem affecting thousands of people—so far. But, as I mentioned several months ago, some teleworkers are seriously affected by one barrier: double taxation.

The scenario is as follows: Janice teleworks for an employer in New York, say, but lives in California. Occasionally Janice goes to New York for meetings and conferences in her employer’s facilities but mostly she works from her home in California. She loves her job and is doing well at it. Except for one thing: New York wants to tax her income even though she earns it primarily in California. Of course, California also wants to tax the same income since she earns it there. What to do?

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