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Halliburton Employees Working Remotely May Run into These Tax Hurdles

Tax withholding and filing status should be updated for Halliburton employees moving to remote work to avoid surprise liabilities, says Brent Wolf, of The Retirement Group, a division of Wealth Enhancement Group.

With remote work continuing to reshape the workforce, Halliburton employees need to be aware of their tax obligations across states and having a tax advisor can help with that, says Kevin Landis, of the Retirement Group, a division of Wealth Enhancement Group.

What is it that we will discuss here:

Tax consequences of working from home including withholding and filing returns in several states.
Deductions for remote workers affected by the Tax Cuts and Jobs Act.
Considerations for employers with remote workers across states.

This COVID-19 pandemic also forced businesses into remote work and amplified a trend that was already taking place. Even before the pandemic, more Americans worked from home. From 2005 to 2019, more than 216% of all companies worldwide work remotely (GlobalWorkplaceAnalytics.com, 2021). But with millions starting to return to work, telecommuting part-or full-time is becoming standard (McKinsey and Company, 2022). But working from home has its benefits - less commuting and more flexible schedule - but it comes with tax responsibilities. Halliburton employees should know about these changes in the workforce and prepare accordingly.

These four tax considerations apply whether you work from home or contract out remote workers for a company like Halliburton:

Withholding Tax from Wages Remote working has helped many people relocate to new states in metropolitan areas and smaller cities. This mobility can cause withholding errors if you fail to notify your payroll department of your new home address. And remember that workers must have taxes withheld based on the state's tax rules wherever their employer is located. Not updating your withholding information could mean an unexpected Tax bill or underpayment penalties come Tax Day.

Some states also require that employers withhold taxes from nonresident employees' wages. For example, New York requires employers to withhold state income tax from nonresidents' wages.

Filing Returns in More than One State. In two or more states you may have to file a tax return for each state you work in. It's because many states require nonresident employees to pay state income taxes if they earned money in that state, wherever they lived. A few states even require a tax return if you worked anywhere within their borders - even on a business trip.

Note also that residents or workers of any of the nine U.S. states that do not collect income tax - Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming - will not be required to report their income to that state.

Deducting Business Expenses, The Tax Cuts and Jobs Act of 2017 eliminated several miscellaneous Tax deductions, including unreimbursed business expenses, through 2025. Therefore, expenses you incur while working from home that are not reimbursed by your employer cannot be deductible on your taxes. In past tax law, workers could deduct some out-of-pocket work-related expenses greater than 2% of adjusted gross income. But that deduction will return in 2026.

In contrast, if you are self-employed, you can still deduct many business expenses on Schedule C of your Form 1040.

We Have Workers in Several States. You own a business in one state but have a remote employee in another state - you may need to register your business in that employee's home state. It involves estimated taxes, tax returns, and other reporting to the state. If this is you, consult a tax professional who knows state and federal tax laws.

To summarize - taxes are complicated - and the trend toward remote work has only added fuel to the fire of understanding your tax obligations as an employee or an employer. For those scenarios that apply to you, we recommend that you speak with a tax advisor about how to best navigate this complex landscape.

It is obvious that remote work has many benefits including flexibility and low cost. It does bring up tax issues, however. Being informed and seeking advice can help people and businesses comply with tax laws and avoid potential problems.

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Research suggests that working from home may benefit older people's mental health. For those nearing retirement age, remote work may reduce stress and increase job satisfaction (University of Michigan, 2022). This finding applies especially to our target audience of 60-year-olds who are Halliburton workers about to retire or already-retired retirees. Aware of possible tax issues associated with working from, this group can also protect their financial interests while enjoying less stress and better job satisfaction when approaching retirement age.

Working from home is like going into unknown waters. As with sailing overseas, remote work means more flexibility. But like dangerous seas, there are hidden tax reefs to navigate. Take those tax questions as your personal compass when working from home. Like a seasoned sailor updating charts and course, you need to update your tax withholding and filing methods when you switch to remote work. Doing otherwise may trigger tax storms and financial penalties. Stay alert, hire a tax pro as your first mate, and enjoy your remote work adventure.

Sources:

Fregeau, Harrison. 'Personal Income Tax Implications of COVID-19 & Remote Employment.' Review of Banking & Financial Law , vol. 40, 2021, www.bu.edu .
Pearson, Brian T. 'How the Increase in Remote Employees Due to COVID-19 has Impacted Local Income Tax Revenues for U.S. Cities.' University of Kentucky , 2023, uknowledge.uky.edu/mpampp_etds/421.
'Charting a New Fiscal Course for Hawaii: Fiscal Architecture Approach.' UHERO , 2021, www.uhero.hawaii.edu .
'Remote worker state income tax implications.' Cornell University Division of Financial Services , 2020, finance.cornell.edu.
'Considering the impact of Remote Work on Income Tax Refunds: Michigan Municipal Governments.' Michigan State University , 2022, www.canr.msu.edu .

What are the main eligibility criteria for employees under the Halliburton Retirement Plan, and how have these criteria evolved since the plan was frozen to new participants after December 31, 1996? In what ways do these eligibility requirements impact current and future Halliburton employees?

Eligibility Criteria: The Halliburton Retirement Plan was frozen to new participants after December 31, 1996. Employees who were active participants and at least 55 years old by that date remain eligible under the plan. The eligibility criteria have remained largely unchanged for these participants, affecting current employees by limiting new enrollments, which can reduce the overall scope of retirement benefits offered to newer hires(Halliburton_2_27_2015_H…).

How does the funding mechanism of the Halliburton Retirement and Savings Plan impact the retirement benefits provided to employees? Discuss the actuarially determined contribution method and how it aligns with IRS regulations for pension plans in 2024.

Funding Mechanism: The Halliburton Retirement and Savings Plan uses an actuarially determined contribution method to fund retirement benefits, ensuring that the plan is in line with IRS regulations. This approach calculates contributions based on the plan’s liabilities and participants' service, helping maintain the financial health of the plan in 2024 by adjusting employer contributions as needed to meet legal obligations(Halliburton_2_27_2015_H…).

In the context of the Halliburton Retirement Plan, what options do employees have for distribution upon reaching retirement age or in the event of early retirement? Elaborate on the various distribution forms available, such as lump-sum payouts and annuities, and how these options are designed to support employeesâ€™ financial needs after retirement.

Distribution Options: Halliburton employees have various distribution options upon reaching retirement age, including lump-sum payouts and annuities. These options are designed to cater to diverse financial needs, with employees being able to choose between a one-time lump sum or recurring payments in the form of annuities for greater financial stability post-retirement(Halliburton_2_27_2015_H…).

What are the implications of excluding certain employee groups (e.g., union members, non-resident aliens) from the Halliburton Retirement Plan on the workforce's overall retirement security? Assess how this could affect Halliburton's ability to attract and retain diverse talent in the company.

Exclusion of Employee Groups: The Halliburton Retirement Plan excludes union members, non-resident aliens, and leased contractors from participation, which can impact the overall retirement security of these groups. This exclusion might limit Halliburton's ability to attract a more diverse workforce, as retirement benefits are a key factor in talent retention(Halliburton_2_27_2015_H…).

How can Halliburton employees access their retirement plan benefits, and what steps do they need to take to initiate a distribution request? Provide a detailed explanation of the distribution request process as outlined in the Halliburton Retirement Plan documentation.

Accessing Retirement Benefits: To access their retirement benefits, Halliburton employees must contact the Halliburton Benefits Center at the provided phone number. The distribution request process involves completing specific forms and complying with eligibility requirements to initiate benefit disbursement(Halliburton_2_27_2015_H…).

Considering changes in the economy and retirement landscape, how does Halliburton's approach to retirement benefits compare to industry standards? Analyze the strengths and weaknesses of Halliburton's retirement offerings relative to competitors in the same market segment.

Industry Comparison: Halliburton's retirement offerings, including a defined benefit plan, are competitive but limited due to the freezing of new participants after 1996. This places the company slightly behind competitors that offer more flexible or modern retirement plans, although its pension benefits remain a strong feature for eligible long-term employees(Halliburton_2_27_2015_H…).

How is the financial health of the Halliburton Retirement Plan monitored, and what measures are in place to ensure that the plan remains funded adequately to meet the obligations to its participants? Delve into the regulatory requirements that Halliburton must adhere to, including any recent updates to the IRS regulations in 2024.

Monitoring Financial Health: Halliburton monitors the financial health of its retirement plan through regular actuarial reviews to ensure that it remains adequately funded. The company adheres to IRS regulations and uses plan assets to cover necessary expenses, ensuring the plan can meet obligations to participants(Halliburton_2_27_2015_H…).

What role do Halliburton employees play in influencing the future of the retirement plan? Discuss any avenues available for employees to provide feedback or suggestions regarding changes to the retirement plan offerings or structure.

Employee Influence: While Halliburton employees may not directly influence retirement plan policy changes, they can provide feedback through the Benefits Center. However, changes to frozen plans are rare, so employee input may have limited impact on restructuring or reopening the plan(Halliburton_2_27_2015_H…).

What specific resources does Halliburton offer to employees for learning about and planning their retirement, and how can they be leveraged effectively? Discuss the importance of these resources in helping employees make informed decisions about their retirement.

Retirement Resources: Halliburton offers resources such as retirement planning tools and access to benefits counselors to help employees make informed decisions about their retirement. These resources are crucial in helping employees understand their retirement options and optimize their benefits(Halliburton_2_27_2015_H…).

How can employees at Halliburton contact the company to learn more about the retirement plan and its provisions? What specific contact methods or resources are available for employees seeking further information or assistance regarding their retirement benefits?

Contacting Halliburton: Employees seeking more information about their retirement benefits can contact the Halliburton Benefits Center directly. This service provides guidance on plan details, distribution options, and general retirement inquiries, ensuring employees have access to the assistance they need(Halliburton_2_27_2015_H…).

With the current political climate we are in it is important to keep up with current news and remain knowledgeable about your benefits.

Pension Plan Information: Name of Pension Plan: Halliburton Retirement Plan Years of Service and Age Qualification: Halliburton typically requires a minimum number of years of service and/or a specific age for eligibility in its pension plan. This information is usually detailed in the pension plan documents or summary plan descriptions. Pension Formula: The formula used to calculate the pension benefits under the Halliburton Retirement Plan will be outlined in the plan documents. 401(k) Plan Information: Name of 401(k) Plan: Halliburton 401(k) Plan Eligibility: Information on who qualifies for the Halliburton 401(k) Plan, including any age or service requirements. Details on Contribution Matching: How Halliburton matches contributions to the 401(k) Plan, if applicable.

Restructuring and Layoffs: Halliburton has undergone significant restructuring in recent months as part of its strategy to streamline operations and reduce costs. The company announced in early 2024 that it would lay off approximately 2,000 employees globally. This move is intended to improve operational efficiency and adapt to fluctuating demand in the oil and gas sector. Given the current economic climate and ongoing volatility in energy markets, this restructuring is crucial for Halliburton to remain competitive and financially stable.

Stock Options: Halliburton provides stock options to its employees as part of its compensation package. These options are typically offered to executives and high-level employees. The options allow employees to purchase Halliburton shares at a set price, usually lower than the market price, after a specified vesting period. Restricted Stock Units (RSUs): Halliburton grants RSUs as a form of long-term incentive compensation. These RSUs are awarded to employees with certain performance criteria and vesting schedules. The value of RSUs is tied to Halliburton’s stock performance and converts to actual shares upon vesting.

Health Benefits Overview: Halliburton offers a range of health benefits including medical, dental, and vision coverage. They also provide wellness programs and employee assistance programs. Healthcare-Related Terms: PPO (Preferred Provider Organization), HSA (Health Savings Account), FSA (Flexible Spending Account), EAP (Employee Assistance Program).