The COVID-19 pandemic has not only forced businesses to adopt remote work but has also accelerated a trend that was already on the rise. Even before the pandemic, the number of Americans working from home was increasing steadily. Between 2005 and 2019, the number of people regularly working remotely grew by an impressive 216% (GlobalWorkplaceAnalytics.com, 2026), especially for top companies. As millions of Americans have now begun to return to the office, the option to continue telecommuting either part- or full-time has become the norm (McKinsey and Company, 2026). However, while working from home offers numerous benefits, such as reduced commuting expenses and increased schedule flexibility, it also presents certain challenges in terms of tax obligations.

Here are four key tax issues to be mindful of if you work from home or employ remote workers at a company like PG&E:

1. Withholding Tax from Wages

The ability to work remotely has enabled many individuals to move to new states, both in metropolitan areas and smaller cities. This mobility can lead to withholding errors if you fail to promptly inform your payroll department about your change in residence. It is important to note that workers are required to have taxes withheld according to their state's tax rules, regardless of their employer's location. Neglecting to update your withholding information could result in a significant tax bill or even underpayment penalties when Tax Day arrives.

Additionally, some states mandate that employers withhold taxes from the wages of nonresident employees. For instance, the state of New York requires employers to withhold state income tax from nonresidents' wages.

2. Filing Returns in Multiple States

If you work in two or more states, it is likely that you will need to file a tax return for each state. This requirement arises because many states necessitate nonresident employees to pay state income taxes if they earned money within that state, regardless of their place of residence. Some states even mandate a tax return if you worked within their borders in any capacity, including for a business trip.

It is worth noting that individuals who live or work in one of the nine U.S. states that do not charge income tax—Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming—will not be obligated to report their income to that state.

3. Deducting Business Expenses

The Tax Cuts and Jobs Act of 2017, effective until 2025, eliminated many miscellaneous tax deductions, including unreimbursed business expenses. Consequently, any out-of-pocket expenses incurred while working from home that are not reimbursed by your employer cannot be deducted from your taxes. In previous tax law, workers were able to deduct certain out-of-pocket work-related expenses that exceeded 2% of their adjusted gross income. However, this deduction is scheduled to return in 2026.

On the other hand, if you are self-employed, you can still deduct many business expenses on Schedule C of your Form 1040.

4. Employing Workers in Multiple States

If you own a business in one state but have an employee working remotely in another state, you may be required to register your business in the employee's home state. This entails paying estimated taxes, filing tax returns, and fulfilling other reporting obligations to that state. If you find yourself in this situation, it is crucial to consult with a qualified tax professional who can guide you through the intricacies of state and federal tax laws.

In conclusion, taxes are complex, and the shift to remote work has further emphasized the importance of understanding your tax obligations, whether as an employee or an employer. If any of the aforementioned scenarios apply to you, it is highly recommended to meet with a tax advisor who can assist you in navigating the complexities of this evolving landscape.

It is evident that the rise of remote work offers numerous advantages, such as increased flexibility and reduced expenses. However, it also brings about tax-related considerations that should not be overlooked. By staying informed and seeking expert guidance, individuals and businesses can ensure compliance with tax regulations and avoid potential pitfalls.

Remote-work tax implications add complexity, making it essential to understand how PG&E's benefit programs factor into your overall financial picture. PG&E maintains an active defined benefit pension plan, meaning eligible employees continue to accrue benefits based on years of service and compensation. If you are eligible for a lump sum payout, IRS Section 417(e) segment rates determine how the future annuity stream converts to a present-value payment - rising rates compress the lump sum, so monitoring the plan's stability period and lookback month is critical before you lock in your election date. The choice between a single-life annuity, a joint-and-survivor option, or a lump sum (where available) is generally irrevocable once made, and timing that decision relative to interest rate conditions can meaningfully affect your retirement income picture.

From a healthcare perspective, PG&E provides continued medical coverage to eligible retirees, which can bridge the gap between retirement and Medicare eligibility at age 65 or serve as a supplement to Medicare thereafter. Confirming the service and age requirements for retiree coverage, and understanding your premium contribution, is an important step in building an accurate healthcare cost projection. Coordinating PG&E's retiree coverage with Medicare Part B and Part D enrollment timing can also reduce duplication and avoid late-enrollment penalties. Seeing all of your PG&E benefits in the context of a single retirement income plan is the most effective way to plan with confidence.