Remote worker living in different state than employer - who handles tax withholding?

I just got hired for a fully remote W-2 position. The company is based in New York, but I live in Texas. They're withholding NY state taxes from my paycheck even though I've never set foot in New York and do all my work from my home in Austin.

Is this right? I thought remote workers only pay taxes in the state where they actually live and work. I don't want to deal with filing NY state taxes when I'm never there.

I went through this exact thing last year. NY's convenience rule is real and it's aggressive. A few states have it (NY, NE, DE, PA, CT, NJ in some cases).

The good news: Texas will give you a credit for taxes paid to NY, so you won't be double-taxed. The bad news: oh wait, Texas has no income tax, so you just lose that money to NY.

I ended up negotiating a higher salary to offset the unexpected tax burden.

That's not how it works. "Company policy" doesn't override state tax law. The employer has a legal obligation to withhold in the correct jurisdiction.

If they're telling you to "sort it out" at tax time, that means you'd have to:

• File a NY nonresident return to get a refund of taxes you never owed
• Wait months for NY to process the refund (they're notoriously slow)
• Deal with potential audits or complications

I'd recommend sending HR a formal written request citing that you work 100% from Texas, have no NY nexus, and under Pub 131 they should not be withholding NY taxes. Copy their legal/compliance team if possible.

If they refuse, you may want to consult with an employment attorney. Employers can face penalties for incorrect withholding.