Where should you file for unemployment if you are a telecommuter?

Updated : August 11th, 2022

Telecommuter

Question from Julie

I worked for a company, as a W-2 consultant, from June 2011 until the end of December 2011 when the assignment ended for the client I was working on.

The company that hired me is Head Quartered in AZ, the client is located in TX, and I worked remotely from home in IN.

I originally filed for UI benefits in IN, which was denied due to “No record of wages in my base period.” I contacted the State of IN, and I was told that since the company that hired me is located in AZ, I should file for UI benefits in AZ.

I am confused, as I thought that the state you file for unemployment benefits in was the state that had state payroll taxes withheld (in my case, IN state taxes where withheld).

Did I received the correct information from IN and I should file for UI benefits in AZ?

Thank you for any information to clarify this for me.


Response To: Where should you file for unemployment if you are a telecommuter?

Hi, Julie.┬áTelecommuting presents tax issues confusion for most everyone I think, and I’m no tax specialist, so I’m no exception.



However, since Indiana has already denied your claim, you certainly can and should file in AZ.

If your employer paid UI taxes in AZ on your wages they should show up as long as the wages are located in the base period attached to your claim for benefits.

However, I’m a little curious as to why Indiana didn’t treat your claim as interstate and contact AZ to locate those wage credits.

What I know about telecommuting is it’s full of opportunity for issues about benefits due to confusion about tax issues of all kinds, including unemployment and the benefits and court rulings are unsettling to me.

New York was the state that ruled an employer didn’t have to pay unemployment tax or pay benefits to an employee of a NY company that telecommuted from Florida because she wasn’t physically located in NY while doing the work.

I also believe NY is the same state that ruled a telecommuting TN man had to pay NY income tax on 100 percent of income earned even though he only worked in NY physically, 25 percent of the time.

But, I’ve not read anything rotten about telecommuting in connection with AZ or IN, yet.

Let me know what AZ tells you. Telecommuting issues are evolving and changing as I type.

Chris

Comments for Where should you file for unemployment if you are a telecommuter?
UI Benefit Update

by: Julie S

I wanted post an update on my on-going quest in obtaining UI Benefits, being a telecommuter.

I contacted my last employer’s payroll department, out of frustration of the time it is taking hearing back from AZ and running out of money. I wish I would have done this sooner, as the payroll department emailed me my W-2 and the UI Form they submitted to the State of Indiana. They did pay in Indiana and that is where I should have applied. Thus, it appears that Indiana gave me inaccurate information when they told me I need to file in AZ, where my employer was located.

I am now in the process of reopening my claim, with the State of IN, including the supporting documents I received from my last employer. I was told to call back the State of IN in 2 business days, to “get the ball rolling” after they had a chance to review the information I submitted.

This still is not a resolved issue, but at least I feel I am finally moving forward in the right direction.

Additional Information

by: Julie S

Thank you so much for responding to my question. Telecommuting does seem to be a murky area, as I have noticed it can be handled different ways by different states.

I did call back the State of IN this morning, to verify the information I received yesterday was correct. Again, IN told me that I needed to file for UI benefits in the State of AZ, where the employer is located.

I did file in AZ, and it gets more interesting as my application for UI benefits is proceeding. AZ doesn’t show any record of wages, in the base period, under my social security number. I was definitely earning wages for this employer at that time.

AZ filed a Wage Protest against my employer, and now I have to wait until the employer responds.

I will keep you updated as this proceeds, as I am curious how this is all going to turn out.

The only defense the employer will have as far as I can see, is that you were an independent contractor, i.e., self employed.

Get prepared, understand he tests used by the state of AZ for determining “employee” or not.

Chris


If I work remotely in Florida for a company in Texas, do I collect unemployment from Florida or Texas?

Posted by Barbara (Florida)

I was originally hired by a company in Texas to work in Texas but my husband was transferred to Florida so I have been working out of my home in Florida for the last 6 years for a company in Texas (they have no Florida locations).


Hi Barbara,

This is a very interesting question and one I can’t provide a definitive answer for. If you do a search for “unemployment decisions + telecommuting” you will find a whole bunch of stuff primarily dealing with one case which concerns Florida and New York. Apparently, it was never escalated to the US Supreme Court because the claimant involved was pro se and New York’s decision required her to pay back the benefits she did receive. She had first tried Florida and was denied. Of course, the top result is one of those legal research sites that require money to research which may have more current decisions.

Everything is vague about this issue, but the decision leads me to think that Florida would be the place to file.

It seems to me the interstate agreement would just make Florida the “agent” state, but Texas would be the liable state if your employer paid Texas unemployment tax on your wages. The decision was based on the “locality of work”. The only one benefiting from the decision is the employer.

Quite frankly, I cannot believe some lawyer hasn’t jumped all over this issue and escalated it to the highest court in the land because telecommuting is becoming so commonplace and the issue is unsatisfactorily resolved…per me:)

I also did a search which added USDOL because I think the United States Department of Labor would be the agency that needs to resolve this problem by possibly addressing it in the interstate agreement between the states. No luck, just huge policy research documents.

I do know that the USDOL has redefined “paying state” that closed a loophole which allowed someone from…let’s say Florida that has a maximum WBA of $275 to go to Massachusetts and file where they would probably get quite a bit more per week. The problem was the Florida employer paid taxes to pay Florida (or any other state) benefits…not Mass benefits, which are at least double. The problem was, who pays for the extra money the claimant receives.

I’m sorry I can’t help you more and I invite you (Please!) to come back and post a comment to tell us what happens.

Chris

Comments for If I work out of my home in Florida for a company in Texas, do I collect unemployment from Florida or Texas?
Company Paid Texas Premiums

by: Barbara from Florida

I just found out from my former employer that they paid my unemployment insurance premiums to the state of Texas, so I’m going to apply to Texas….I worked for my former employer 10 years the first 4 while living in Texas and the last 6 while living in Florida. Do you know if I have to apply in person or can everything (including appeals) be handled via the internet?

Thanks,
Barbara from Florida

Hi Barbara,

You would not have to file in person. I don’t think any state has unemployment offices per say anymore anyway.

If Texas won’t allow you to file online because you live out of state, they should have a phone number for you to call.

Conclusion

by: Barbara from Florida

I talked to the Texas employment office and was advised that because the Company paid premiums to Texas and the Company is in Texas, Texas is responsible for my unemployment benefits and she took my application over the phone. But I do have to register and post my resume at the Florida employment site (www.employflorida.com).

Thanks so much for letting everyone know Barbara. I think it’s great you came back to update so anyone with a similar question can benefits from what you learned.



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