Paying State Income Tax in Non-resident States

[WCMason]

I have 3 FMO's all tell me it is not so. I don't know most of those have done this a while say it is not so.

I respect you on the forum and I am not trying to be a hard Azz However you did say the whole thing came up because an INS carrier submitted income you did not even earn. and that you just now for the first time are getting no res lic

All I'm looking for something in writing that says we don't have to file tax returns in non-resident states where we are licensed to do business. I'm actually eager to see it. I would never take what an upline says as the final word. I was just hoping for something a little more solid than agents saying it's not so.

 

[vic120]

All I'm looking for something in writing that says we don't have to file tax returns in non-resident states where we are licensed to do business. I'm actually eager to see it. I would never take what an upline says as the final word. I was just hoping for something a little more solid than agents saying it's not so.

Ok but we are not talking about 1 upline but 3 and many other agents.I mean can you show me something in writing I don't have to pay a penalty for breathing air.

Listen if the Ins carrier did not accidently put you down for income you didn't earn and probably did say as mistakenly putting you down as a res of that state would it even come up.

we are selling over the phone we are not physically going there were are not paid by client we are paid by Ins carrier, we are not importing physical product.

 

[Todd King]

All I'm looking for something in writing that says we don't have to file tax returns in non-resident states where we are licensed to do business. I'm actually eager to see it. I would never take what an upline says as the final word. I was just hoping for something a little more solid than agents saying it's not so.

Let's just put it this way. If it were true that you had to pay taxes in multiple states, the insurance company would have to send you a 1099 reflecting the income that was generated in each state. No company does that.

As was said before, the client does not pay you, they pay the insurance company. The insurance company then processes that payment and THEY pay the taxes on that. The company turns around and pays you for the service that you did for them.

 

[Thad.Sipple]

The only place I can point you to is to call your carriers and ask them if they report it to the non-res states. You won't find a single one that does.

But being 1099 isn't it our responsibility to file correctly. If MOO somehow doesn't 1099 me, isn't it still my responsibility to still file the earnings, even if the carrier accidentally doesn't report it to me it the IRS?

That is what skipper is getting at I think.

 

[Todd King]

But being 1099 isn't it our responsibility to file correctly. If MOO somehow doesn't 1099 me, isn't it still my responsibility to still file the earnings, even if the carrier accidentally doesn't report it to me it the IRS?

That is what skipper is getting at I think.

You're correct, it is our responsibility, but let's just talk about the companies that do send you one, and there are plenty that do it correctly. Of the companies that do it correctly and want to do it correctly, they would send you a 1099 for each state, yet there is no company that does that. Even the captive companies.

But my main point is that you get paid by the carrier, not the insured. The carrier is paying you for the service that you do for them. That money comes from one place...the carrier. The carrier is responsible to the individual states for the sales, not the agent.

 

[paul43]

Does a Agent have to have a non-resident license to sell FE in other states other than the one he is registered in?
And if he does, how does he go about getting the license?

Thank You

 

[Thad.Sipple]

Does a Agent have to have a non-resident license to sell FE in other states other than the one he is registered in?
And if he does, how does he go about getting the license?

Thank You

sircon.com .........

 

[wln417]

As I understand it, a professional athlete has to pay taxes to every state (and Canada) he plays ball in, and he's only paid by the club he contracts with.

 

[sirherbie]

I think we're blowing this subject way out of whack. #1 if this were really an issue don't you think state revenue depts would have jumped on the cos to segregate an agents income by state? If this were an issue compliance would start with the cos paying us.Its kind of like 1099-int . The banks report it to the client and the irs . Cos would have to report it to us and the irs .Also I'll use the example of no taxes for Internet vendors who don't have a physical office or warehouse in that state. 99% of agents have no physical office in other states. I come back to why we've heard nothing about this in yrs past. The reason why it's a zero sum game. What state A would gain from me having to pay state income Taxes in their state they'd lose from another agent paying non resident taxes to another state instead of paying it to state A . Let's put the shoe on the other foot. I dare any agent in let's say the state of ca who has high state income taxeand sells90% of their business in Florida to file their cal return and not claim their state income tax siting "I did business in Florida and I file my state return their@. Lol California would said no sir

 

[walthamny]

It is always a zero sum game. The reason this has not become a big issue is that only CA and NY, have an incentive to go after large insurance producers and find some money which gets offset by whatever home state the agency has already paid taxes on. So you need to find an agent who produced at least 20000 in commissions as a non resident to make it worthwhile for tax auditor. I don't think there are too many.