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119-hr-10142119th CongressWALLET

Multi-State Worker Tax Fairness Act of 2026

Sponsored By: Representative Himes, James A. [D-CT-4]

Introduced

Summary

This bill would create a federal rule that prevents states from taxing nonresident workers for time they are physically working in another state. It sets clear tests for when a nonresident counts as present, and defines key terms like nonresident, employee, employer, and compensation so states use the same baseline rules.

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Bill Overview

Analyzed Economic Effects

3 provisions identified: 3 benefits, 0 costs, 0 mixed.

Stop state tax on out-of-state pay

If enacted, this would stop a State from taxing the pay of a nonresident for periods when that person is physically present in another State. A State could treat someone as working in that State only if the person is physically present there. The bill would bar using a "convenience of the employee" or similar test to count time at home as presence in the taxing State. Employer rules about whether time is normal work, nonworking, or unpaid would control limited exceptions. These rules would take effect on the date of enactment.

Define who and what counts

If enacted, this would define key terms used by the section that limits State taxation of nonresident workers. "State" would include each State, the District of Columbia, and U.S. territories. "Nonresident individual" would mean someone who is not a resident of the taxing State. "Employee," "employer," and "compensation" would be defined for applying the rule to wages and contractor pay. These definitions would take effect on the date of enactment.

Clarify what the rule does not change

If enacted, this would say the section limiting State tax on nonresident pay does not change other tax rules. It would not affect taxes on corporations, partnerships, trusts, estates, LLCs, or other entities. It would not affect taxes on people in roles like shareholders, partners, or beneficiaries. It would not affect income taxes on dividends, interest, rents, royalties, or other unearned income. This clarification would take effect on the date of enactment.

Sponsors & CoSponsors

Sponsor

Himes, James A. [D-CT-4]

CT • D

Cosponsors

  • Rep. Pappas, Chris [D-NH-1]

    NH • D

    Sponsored 8/24/2026

  • Rep. Gottheimer, Josh [D-NJ-5]

    NJ • D

    Sponsored 8/24/2026

Roll Call Votes

No roll call votes available for this bill.

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