Income/Franchise:
Nebraska DOR Says Special Pandemic-Related Employee Telecommuting Rules Have Expired

Income Tax Withholding FAQs, Neb. Dept. of Rev. (7/27/21); Notice of the Expiration of GIL 29-20-2, Neb. Dept. of Rev. (7/20/21). The Nebraska Department of Revenue (Department) explains that through July 29, 2021, it will not require employers to change the state which was previously established in their payroll systems for income tax withholding purposes for those employees who were telecommuting or temporarily relocated to a work location within or outside Nebraska due to the COVID-19 pandemic. According to the Department, this change in employee work location is not required beginning with the date the emergency was declared by Nebraska Governor Pete Ricketts (i.e., beginning March 13, 2020) and ending 30 days after the end of the emergency (i.e., ending July 30, 2021). As a result, the Department suggests that beginning on July 30, 2021, “employers must review their payroll systems for income tax withholding purposes for employees working at a location that is in a different state to assure compliance with Nebraska requirements in 316 Neb. Admin. Code, Ch. 21 and Ch. 22, § 003.”

Similarly, the Department states that Nebraska’s special treatment of alternative employment arrangements due to the COVID-19 pandemic for purposes of calculating employment levels under the Nebraska Advantage Act expires on July 30, 2021, and thus its underlying general information letter on the subject (i.e., GIL 29-20-2) expires on this date, too. Pursuant to GIL 29-20-2, the Department considers employees who worked at a project location prior to March 13, 2020, and who were displaced by the COVID-19 pandemic, to have worked at the project location through July 30, 2021. Accordingly, the Department explains that after July 30, 2021, i) “employees must work at the project, or as a teleworker pursuant to Neb. Rev. Stat. § 77-5714(3), to count toward the calculation of new employees,” and ii) “taxpayers should resume tracking the location from which each employee works.” Please contact us with any questions.