Your employee lives in New Jersey. Your office is in New York. She spends a week visiting family in Pennsylvania and logs in from there for a few days. Under the letter of the law, she may need to file income tax returns in three states for that pay period. You, as her employer, may need to adjust withholding for each of those states for the days she worked from each location.
Almost nobody is doing this. The Tax Foundation confirms it. And they say the problem is getting worse, not better.
In April 2026, the Tax Foundation published a podcast episode titled "Remote Work and State Taxes: What You Need to Know." Katherine Loughead, Director of State Projects at the Tax Foundation, walked through the current state of nonresident income tax laws across all 50 states. What she described is a system that was never designed for the way people work now, and has not been updated to catch up.
Here is what matters if you run HR, payroll, or finance for a company with remote or hybrid employees.
1. The core problem is real and getting worse
Loughead was direct: "People much more quickly run into these non-resident laws now than they did even a decade or two ago. But the problem is state tax laws are really not keeping up with this at all."
She called the current framework "antiquated laws that are now really aggressive and binding for our modern, really highly mobile workplace era."
A Tax Foundation director saying the system is broken is not a marketing claim. It is independent, nonpartisan validation of the exact problem that Atteniv's Pillar IV, Tax Nexus Detection, was built to solve. The laws are antiquated. Compliance is near-zero. Enforcement is spotty. Nexus Radar turns that chaos into structured, proactive detection before exposure becomes an audit.
2. 22 states require filing after a single day of work
The Tax Foundation's research identified 22 states where working even one day in-state triggers a nonresident income tax filing requirement. That means employers need to track every employee's physical location on every workday across all 50 states, because the difference between compliant and noncompliant can come down to a single Tuesday.
Loughead was blunt about how people actually respond to these laws: "It's kind of laughable when you look at these laws and you're like, are you really wanting us to do this? Because no one, only very like higher earners do this."
Host Kyle Hulehan responded: "It's definitively like not good to have laws that people don't really follow."
He is right. But the fact that most people ignore the law does not mean the law ignores them. State tax departments enforce selectively, and they tend to select higher earners and their employers. This is exactly what Atteniv's presence detection engine does, but automatically. The transcript proves the manual approach is broken. Nobody knows where their employees actually are, and the law says they should.
3. The convenience rule creates the worst-case scenario
8 states use "convenience of the employer" rules: Alabama, Connecticut, Delaware, Nebraska, New Jersey, New York, Oregon, and Pennsylvania. These states tax remote workers based on where the employer's office is located, not where the employee actually works.
Loughead walked through the scenario: "If you work technically out of a New York based office, but you live in Colorado 'cause you like to hike and ski and you wanna live in Colorado, if that's not a necessity of doing the job, and that's just because you wanna live in Colorado and your employer lets you live in Colorado, New York would say, hey, still owe income taxes on all of your salary that you earned from that employer."
Two complete income tax bills. Two separate states. One salary. Loughead warned employers directly: "If you're an employer that wants to offer remote work flexibility, but you're based in a convenience rule state, your employees are not gonna be happy about that if they suddenly are surprised to find out that they owe two complete income tax bills to two entirely separate states."
If you are based in one of those 8 states and you do not know where your remote employees are actually working, you are exposing them to double taxation. Atteniv's presence detection tells you exactly who is where, so you can flag convenience-rule exposure before it becomes a tax liability.
4. Employers are not tracking this. The Tax Foundation confirms it.
When asked whether employers are actually adjusting withholding when employees travel to other states for work, Loughead said: "Most employers, I would venture to guess, probably aren't actually doing this."
She talked to CPAs who confirmed the same thing. Employers are not asking employees which states they spent days working in. They are not adjusting withholding accordingly. The compliance burden is so high and the revenue per filing so low that most organizations have decided to risk it.
Loughead herself manually filed in 6 states where she had traveled for work. She described digging through her Outlook calendar to count working days versus PTO days versus vacation days to apportion her income correctly. In several states, after all that effort, she owed $0 but still had to pay for filing software.
"I can't think of anything that feels more silly than paying, you know, 40, 60, $70 or way more potentially to file that you own nothing to," she said.
Atteniv does not just detect presence. It creates an audit-defendable record of where each employee actually worked. That is the infrastructure employers need but do not have.
5. The patchwork is so complex even experts struggle
Two employees from the same company, attending the same conference in the same state, can have completely different tax obligations based on where they live. Erica York, co-host and Tax Foundation economist, put it plainly: "Two coworkers like traveling to a conference in one state and depending on what their state's policy was, one of them may owe taxes for traveling to that conference and one may not. That is so wild."
Even states with 30-day safe harbors may require your home state to offer reciprocal relief. Two coworkers at the same event could face opposite obligations. This means presence detection alone is not enough. You need to cross-reference the employee's home state against the work state, which is Nexus Radar's exact architecture.
Loughead described having to dig through different parts of state tax codes to find filing requirements versus withholding requirements versus convenience rule. She said "it took quite a while to dig into all the state statutes." If a Tax Foundation director finds this hard, what chance does an HR team have?
6. Congress keeps trying. Congress keeps failing.
The Mobile Workforce State Income Tax Simplification Act would create a uniform 30-day filing and withholding threshold nationwide. It has been introduced, in Loughead's words, "year after year after year." It has never passed.
The reason is simple. States that collect revenue from aggressive nonresident taxation do not want to give it up. The patchwork is not a transitional phase. It is the permanent reality. The problem is not getting solved by legislation. It is getting solved by tools.
7. The "jock tax" clawback extends to high earners
States carve out exceptions to their own safe harbors specifically for athletes, entertainers, CEOs, and "key employees." If you have high earners traveling for work, they may not qualify for 30-day safe harbors at all. Nexus Radar's tiered alerting, which flags exposure before thresholds are breached, directly serves this use case for high-value employees.
What this means for your organization
The Tax Foundation spent 41 minutes making the case for the problem. They did not propose a tool to solve it.
Here is what they said, summarized:
- The laws are antiquated and not keeping up with how people work
- Nobody is complying because the burden is unmanageable
- Employers are on the hook and failing
- The patchwork is too complex for manual tracking
- Federal reform is not coming
- State reform is slow and inconsistent
That leaves employers with a choice. Continue relying on Outlook calendars and hope no state audits your workforce presence. Or build a system that knows where your employees actually are, cross-references that against 50-state threshold logic, and flags exposure before it becomes an audit.
Atteniv's Nexus Radar cross-references actual employee presence against HRIS-registered tax home. It flags silent compliance drift when employees work in unregistered states. It monitors 50-state threshold logic with tiered alerts before limits are breached. It seals audit-ready evidence at every breach point.
Try for free today https://nexus.atteniv.com/dashboard
The infrastructure for hybrid work was never built. The tax compliance layer was never built either. Atteniv builds both.