[Emilia]

Accounting/Tax question… I have a job offer for a position that advertised a salary and a certain amount of days for PTO as well as federal holidays off.

When I met with the VP of Finance, she said she is not incorporated in the state of VA where I live so they would have to tax me Mass.

(state where they are located) taxes and then I file that back on VA tax forms?

Or she said I could just be on retainer/contractor like a 1099. I don’t need health benefits so I don’t have to worry about that part of it.

I just wonder should I let them tax me for income in Mass and then file that back to Va or just 1099 it and have a contract that states that I do get the PTO and federal holidays outlined in the description.

Which one is easier/better?

Thank you!

[Lisa]

What state are up physically working in? And are you a sub contractor or an employee? Do they control your schedule and work or are you free to? Do you have other clients or just one employer.

Don’t accept sub contractor if you aren’t one.

If they are allowing you to work remotely, then they need to set up and withhold in the state you work from.

I work for a NY firm but they withhold VT taxes. I’m an employee because they control the work/their clients, control my schedule (we work M-F 9-5).

[Patrick]

Note in one case you are a W2 employee, and in the other case you are a 1099. Both have significant advantages and disadvantages that you should research.

Note generally your rate should be much higher if being paid as a 1099.

[Valerie]

No, they need to set up in your state. We have employees in 15 states, and set up a new one each time we hire elsewhere.

[Damon]

Someone doesn’t know what they are doing at the company that offered you this position.

[Jane]

If they have an employee performing work in another state, they have to register in that state and withhold and remit the appropriate taxes.

It’s not up to their discretion.

[Jamie]

You should be running this by your accountant. They can help you understand what you need to do if you decide to accept the position as W2 and need to pay VA income taxes or if going the 1099 route is better (doubt it will be better for the reasons previously mentioned by Patrick and Kevin) especially if the employer does not offer a significant bump in pay.

You can google to determine what the advantages/disadvantages are of being 1099 vs W2.

You might not need benefits now but what if you do in the future or what if you get laid off plus no PTO for 1099 unless they are added to your contract.

You could also be liable for any insurances required to protect the work you perform.

BTW, I believe a company is legally obligated to withhold state income taxes where the employee physically works, so if you are working remote in VA then they should be withholding VA income taxes.

[Author]

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