Can Kansas employers keep withholding based on an employee's primary work location while they telework?

Plain-English summary

Kansas Notice 21-03 explains a temporary withholding option for teleworkers created by 2021 Senate Bill 47 (New Section 9), for tax years 2021 and 2022.

The option. For wages paid January 1, 2021, through December 31, 2022, to employees temporarily teleworking in a state other than their primary work location, employers have the option to continue withholding income tax based on the state of the employee's primary work location -- rather than the state in which the employee is teleworking or otherwise working during the COVID-19 pandemic. Where any provision of K.S.A. 79-3296 conflicts with this new section, the new section controls.

Limited and neutral. The option is allowed for tax years 2021 and 2022 only. Importantly, the employer's withholding decision does not affect either the calculation of the employee's actual tax liability or any jurisdiction's authority to impose and collect tax -- it only concerns which state's withholding the employer applies during the temporary telework period.

What this means for you

Employers with teleworking employees

• For wages paid in 2021 and 2022, you may keep withholding based on an employee's primary work location instead of tracking where they temporarily telework.
• This is an option, not a requirement, and it applies only to those two years.

Teleworking employees

• Your employer's withholding choice does not change your actual tax liability or which jurisdictions can tax your income -- you may still owe or be refunded based on where you actually worked.

Common questions

What option does the notice describe? Employers may withhold income tax based on an employee's primary work location rather than a temporary telework location.

What period does it cover? Wages paid January 1, 2021 through December 31, 2022.

Is it mandatory? No -- it is an option for employers, for tax years 2021 and 2022 only.

Does it change the employee's tax liability? No -- the withholding choice does not affect the employee's actual liability or any jurisdiction's authority to tax.

Citations and references

• Senate Bill 47 (2021), New Section 9 -- the temporary teleworker withholding option for wages paid in 2021 and 2022.
• K.S.A. 79-3296 -- withholding provisions; New Section 9 controls where it conflicts for this period.

Source

• Landing page: Kansas Department of Revenue Policy Information Library
• Original document: Notice 21-03

Original ruling text

Policy and Research
109 SW 9th Street Phone: 785-368-8222
PO Box 3506 Fax: 785-296-1279
Topeka KS 66601-3506 www.ksrevenue.org
Mark A. Burghart, Secretary Laura Kelly, Governor

                                         NOTICE 21-03

                          WITHHOLDING FOR TELEWORKERS
                                        (JULY 19, 2021)

   During the 2021 Legislative Session Senate Bill 47 was passed and signed into law. New

Section 9 of the Bill addresses income tax withholding for teleworkers during tax years 2021 and
2022. The new language allows an option for employers to withhold income tax from employees
based on the state of the employee's primary work location, and not on the location from which
the employee is teleworking, due to the pandemic. This option is allowed for tax years 2021 and
2022 only.

   Specifically, the new statutory language provides:

         New Sec. 9. For the period of January 1, 2021, through December 31, 2022, for wages
   paid to employees who are temporarily teleworking in a state other than their primary work
   location, employers shall have the option to continue to withhold income taxes based on the
   state of the employee's primary work location and not based on the state in which the
   employee is teleworking or otherwise working during the COVID-19 pandemic. If any
   provisions of K.S.A. 79-3296, and amendments thereto, are in conflict with the provisions of
   this section, the provisions of this section shall control.

   The provisions of New Section 9 are effective for wages paid January 1, 2021, through

December 31, 2022. It is important to note the employer's decision with regard to withholding
will not affect either the calculation of a taxpayer's liability or a jurisdiction's authority to impose
and collect tax.

                                    TAXPAYER ASSISTANCE

  Additional copies of this notice, forms or publications are available from our web site,

www.ksrevenue.org. If you have questions about this Notice, please contact:

                                 Taxpayer Assistance Center
                                Kansas Department of Revenue
                                Scott Office Building, 1st Floor
                                       120 SE 10th Ave
                                        P. O. Box 3506
                                   Topeka, KS 66601-3506
                                     Phone: 785-368-8222
                                      Fax: 785-291-3614