Multi-State Worker Tax Fairness Act of 2026

Key Points

• The bill says a state can only tax a nonresident worker's pay for time the worker is physically present in that state, ending taxation based on where an employer is located.
• It specifically bans states from using 'convenience of the employer' tests that currently let states like New York tax people who work from home in another state simply because their employer is based there.
• The protection covers both regular employees and independent contractors, so freelancers working remotely across state lines get the same treatment.
• If passed, the new rule would apply as soon as the bill is signed into law, with no phase-in period.