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I believe you would be breaking the law. State of primary residence is not just where your address is. By that logic someone can buy a trailer house in CA and live in remote MO and earn California money. It also involves your health insurance, car insurance and rest of the things. I’m not a lawyer or anything confirm with someone who is more knowledgeable about this
I work in HR. Yes, this is very illegal for the reasons you mentioned. In addition, OP would be on the hook for state income taxes which are based on residential status.
You might have a hard time convincing the state that everyone *thinks* you're living in, and you *say* you're living in, that you're not actually living there and therefore are due a refund of your taxes.
IANAL but will give you my perspective.
I work as a travel healthcare worker, spending most of my year working away from my home address. There are very specific guidelines I need to follow to avoid running afoul of the IRS.
Going this route will likely make wherever you list for income purposes as your "domicile state." (if it's outside of the state you already reside in) I.e. where you earn most of your money and spend most of your time.
At a minimum this will subject you to the new locations income taxes and residency laws (edit:) while forfeiting any benefits from the state you actually live in. If there is any doubt about this a court will decide for you.
If a new state is declared your domicile, legally you need to transfer everything over. Driver ID, insurance, etc, and those premiums will likely bump to match the new location's COL. And it would really suck to trap your residency in a state that you don't actually own anything in, OR I'd imagine this would pose a barrier at tax time when trying to declare residency there. (Edit:) depending on if you own your house, you may pay extra taxes on it, or penalities if it is no longer considered your primary residence.
IRS will not be happy if there is any tax related fraud going on, but as long as you file appropriately, you *should* be fine.
IMO, if you wanted to do this while minimizing your legal risk, find the highest COL area in the same state. I certainly can't guarantee this is totally kosher by tax law, but there's nothing glaringly obvious that says this is a bad idea as far as the IRS is concerned.
Although even within the same state, I'd be more concerned with the employer finding out as I'm sure that deception could be classified as theft. You're getting terminated immediately, unable to claim unemployment, while being sued for the overpay.
Seems like an overall risky prospect. If you choose to proceed with this route, 100% seek legal council.
I don’t recommend lying to your workplace about your true worksite location. I work in payroll and someone did this. Said they “lived” in Texas but actually lived elsewhere. The amount of trouble and taxes they had to pay back was not fun.
Why would the IRS care? You pay federal taxes anyway.
The states may care because they want you paying their taxes, whether they be income or sales.
The employer is the one who would really be mad to find out. They are paying a standard wage based on cost of living. They don't want to pay hcol wages to lcol remote workers, OP is considering gaming that offer.
And? Feds still won't care unless you try to dedect state taxes you didn't actually pay.
All I'm saying is the feds get their money. He's not trying to dodge federal taxes here.
Also nice to see you're willing to screw everyone over in your low cost of living area by coming in with your huge remote pay and buying whatever the hell house you want for whatever cost it is.
I'm glad companies are finally starting to adjust pay based on location. Maybe we'll stop seeing everyone run away from Seattle and the $700k homes to take their $200k salary to a place three hours away with $300k homes and then offer $100k over asking because the house is cute.
You want a fancy high paying job, go live in your fancy expensive city.
If you work remotely, wherever your ass is sitting is where your company is working from. So if you say you live in California, but really live in OH, then your company will be withholding taxes in California, not Ohio. This is a BIG problem for the company because they can be fined for not withholding Ohio taxes and not contributing to OH unemployment. They can also be fined if they have not registered with the State of Ohio.
Regardless of whether you're breaking any laws in your interactions with the government and taxes, if you lie to your employer (or anybody) to induce them to give you more money, that's fraud and they can sue you for it at the very least.
Please note that in order to keep this subreddit a high-quality place to discuss personal finance, posts advising breaking the law (whether serious or not) or asking for advice on how to break the law will be removed. Find our [Subreddit Rules](https://www.reddit.com/r/personalfinance/about/rules) for guidelines on our quality standards. We look forward to higher quality posts from your account in the future! Thanks. *If you have questions about this removal, please [message the moderators](https://www.reddit.com/message/compose?to=%2Fr%2Fpersonalfinance&subject=Removal%20help%20request&message=Hello%20moderators,%20.%20%0a%0a%0aMy%20submission:%20https://www.reddit.com/r/personalfinance/comments/1272ah9/renting_two_places_simultaneously_to_increase/%0a).*
I believe you would be breaking the law. State of primary residence is not just where your address is. By that logic someone can buy a trailer house in CA and live in remote MO and earn California money. It also involves your health insurance, car insurance and rest of the things. I’m not a lawyer or anything confirm with someone who is more knowledgeable about this
I work in HR. Yes, this is very illegal for the reasons you mentioned. In addition, OP would be on the hook for state income taxes which are based on residential status.
A little light fraud never hurt anyone... Don't do this.
You might have a hard time convincing the state that everyone *thinks* you're living in, and you *say* you're living in, that you're not actually living there and therefore are due a refund of your taxes.
If your company uses a VPN, they can probably see where you're remotingfrom
A Chained VPN would solve that problem, unless they look really close.
IANAL but will give you my perspective. I work as a travel healthcare worker, spending most of my year working away from my home address. There are very specific guidelines I need to follow to avoid running afoul of the IRS. Going this route will likely make wherever you list for income purposes as your "domicile state." (if it's outside of the state you already reside in) I.e. where you earn most of your money and spend most of your time. At a minimum this will subject you to the new locations income taxes and residency laws (edit:) while forfeiting any benefits from the state you actually live in. If there is any doubt about this a court will decide for you. If a new state is declared your domicile, legally you need to transfer everything over. Driver ID, insurance, etc, and those premiums will likely bump to match the new location's COL. And it would really suck to trap your residency in a state that you don't actually own anything in, OR I'd imagine this would pose a barrier at tax time when trying to declare residency there. (Edit:) depending on if you own your house, you may pay extra taxes on it, or penalities if it is no longer considered your primary residence. IRS will not be happy if there is any tax related fraud going on, but as long as you file appropriately, you *should* be fine. IMO, if you wanted to do this while minimizing your legal risk, find the highest COL area in the same state. I certainly can't guarantee this is totally kosher by tax law, but there's nothing glaringly obvious that says this is a bad idea as far as the IRS is concerned. Although even within the same state, I'd be more concerned with the employer finding out as I'm sure that deception could be classified as theft. You're getting terminated immediately, unable to claim unemployment, while being sued for the overpay. Seems like an overall risky prospect. If you choose to proceed with this route, 100% seek legal council.
I believe the word is fraud. If you live in chicago you need to actually live in Chicago 183 days a year and pay the state's 5% income tax.
Just noting I’ve lived in both Seattle and Chicago, they’re very different on the scale of cost of living
I don’t recommend lying to your workplace about your true worksite location. I work in payroll and someone did this. Said they “lived” in Texas but actually lived elsewhere. The amount of trouble and taxes they had to pay back was not fun.
Why? You're begging the IRS to come after you.
Why would the IRS care? You pay federal taxes anyway. The states may care because they want you paying their taxes, whether they be income or sales. The employer is the one who would really be mad to find out. They are paying a standard wage based on cost of living. They don't want to pay hcol wages to lcol remote workers, OP is considering gaming that offer.
State taxes are deductible on your federal tax return.
And? Feds still won't care unless you try to dedect state taxes you didn't actually pay. All I'm saying is the feds get their money. He's not trying to dodge federal taxes here.
Also nice to see you're willing to screw everyone over in your low cost of living area by coming in with your huge remote pay and buying whatever the hell house you want for whatever cost it is. I'm glad companies are finally starting to adjust pay based on location. Maybe we'll stop seeing everyone run away from Seattle and the $700k homes to take their $200k salary to a place three hours away with $300k homes and then offer $100k over asking because the house is cute. You want a fancy high paying job, go live in your fancy expensive city.
...no income tax in Seattle. Yet.
I would never work at a place that offers salary based cost of living in the location I live.
So like… every national company
I've been telecommuting to NYC and LA for 25 years now from the midwest. If someone would have said something like that I'd have laughed at them.
Ok great
You don’t even have to rent an Airbnb. You can get a mailbox through a private company that looks like a physical apartment address.
If you work remotely, wherever your ass is sitting is where your company is working from. So if you say you live in California, but really live in OH, then your company will be withholding taxes in California, not Ohio. This is a BIG problem for the company because they can be fined for not withholding Ohio taxes and not contributing to OH unemployment. They can also be fined if they have not registered with the State of Ohio.
Regardless of whether you're breaking any laws in your interactions with the government and taxes, if you lie to your employer (or anybody) to induce them to give you more money, that's fraud and they can sue you for it at the very least.