A remote sales worker living in New York City, Adam Shorey realized he was in a bad place when the coronavirus pandemic hit in March. So he and his girlfriend loaded two cats and their gear into his Subaru and drove to his family’s camp in Sebago to ride out COVID-19.

But by June, Shorey’s girlfriend had found a job in Portland, and Shorey decided he wasn’t going back to New York.

Come next April, where does he file his state income taxes?

“I’ll have to jointly file in New York and Maine,” Shorey said.

That’s the correct answer, according to Mike Santo, a senior tax manager at Wipfli LLP in Augusta. But as taxes tend to be, it’s complicated.


Shorey can claim a credit in Maine so he’s not double-taxed, but exactly when he moved here for tax purposes – March or June – is “murky,” in the view of Santo, who serves on the board of the Maine Society of Certified Public Accountants.

The issue will remain unclear in Maine for at least a few more weeks.

Several states have issued guidance on how to tax income earned in remote locations. Maine Revenue Services is in the midst of such a review as part of a broader examination of tax policy during the pandemic. Its recommendations ultimately will be forwarded to Gov. Janet Mills.

Accountants such as Santo are waiting for that guidance. An unknown number of internet-enabled workers from other states have sought refuge in Maine this year from coronavirus shutdowns in metropolitan areas. Some went to second homes. Some have since gone back to their primary states, some are still here, and some, like Shorey, aren’t going back.

Congress, meanwhile, is considering a bill, the Remote and Mobile Worker Relief Act, that could bring some national consistency to a hodgepodge of remote-worker tax policies among states. The Maine accountants group supports that legislation.

But in an atmosphere of partisan gridlock, chances of agreement are fading as November’s election day nears. That will put added pressure on state officials to create some near-term clarity.


Workers and tax preparers shouldn’t look to the Legislature for that clarity. Lawmakers aren’t expected to reconvene until January. The Portland Press Herald reached out to the co-chairs of the Taxation Committee, but hasn’t heard back.

Maine Revenue Services has put together an internal committee of accountants and policy advisers led by Michael Allen, the associate commissioner for tax policy at the Department of Administrative and Financial Services. Among the focus areas, according to Allen, are:

• Developing a framework to provide consistency for Maine residents who were previously commuting to jobs out of state and were paying taxes on income sourced from that state, but who are now staying home and telecommuting.

• Providing guidance for out-of-state corporations and other businesses that may not have previously had sufficient connection to Maine to create a tax or withholding responsibility, but may have one now, with employees teleworking from Maine because of the pandemic.

• Maintaining the strength of the Educational Opportunity Tax Credit as an employee-attraction tool for young college graduates within Maine, by providing clarification on payment eligibility for borrowers whose federal student loans were placed in automatic forbearance during the pandemic.

The agency already has weighed in to clarify the law around residency requirements for out-of-staters who may own a ski house or summer cottage in Maine, and are here for an extended stay.


An individual is considered a statutory resident of Maine if the person maintains a “permanent place of abode” in Maine and also spends more than 183 days of the year in the state (unless in the military).

There is an exception: If the “abode” is only maintained during a “temporary stay in Maine,” and also because the temporary stay is for the “accomplishment of a particular purpose.”

“However,” the agency noted, “an individual who is domiciled outside of Maine but maintains a second home in Maine at which they stay during part of the year would not meet this exception in (the law), even during COVID-19.”

That means someone living at their second home in Maine for more than 183 days during the tax year would be considered a Maine resident, for tax purposes.

Some remote workers may wonder how taxing authorities even know how long they are in the state. There’s no magic enforcement formula, but Santo, who formerly worked in taxpayer compliance at Maine Revenue Services, said state governments use several techniques. Information filed with the Internal Revenue Service can be matched with state tax returns. Filing for unemployment insurance or even getting a hunting or fishing license can provide clues as to where people are spending time, he said.

Shorey’s tax situation provides an example. As a former resident of the Big Apple, he has been paying a city tax that has been debited directly from his paycheck. He files that tax form annually.


“I’m so happy not to be paying that now,” he said.

Also in Shorey’s instance, he came to Maine on March 21 and didn’t renew the lease on his New York apartment that was due June 1. He since has switched his residency to Maine and considers himself a state resident as of June 1.

“I’m staying in Maine and actively looking for a place to live in Portland,” he said.

Taxpayers such as Shorey will want to fill out a “Schedule NR” form when they file their 1040 ME tax return for 2020, Santo said. That’s how to get credit, so they’re not taxed in two states.

Santo’s trade group has produced a fact sheet noting that several states, including Massachusetts, have passed laws that allow residents working remotely to effectively ignore their work location caused by the pandemic, and make their wages subject to their pre-pandemic location. These rulings are being challenged by some neighboring states, such as New Hampshire, which has no state income tax.

“If remote work arrangements become permanent,” the accountant group adds, “then the fallback … may require an employer to withhold payroll taxes in the remote workers’ resident state.”

Federal legislation could simplify things by creating uniformity and superseding various state laws, but Santo said he agrees with the prevailing view that the Senate and House will be unable to agree on provisions before year’s end.

“The closer we get to Election Day,” he said, “the less likely it’s going to happen.”

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