What is the ‘convenience of employer’ rule in multi-state taxation?

The convenience of employer rule, followed by states like New York, determines where remote employees pay taxes based on whether they work remotely for their convenience or their employer’s necessity. Under this rule, as explained in New York tax guidance, remote workers may owe taxes to their employer’s state unless their remote work is required by the employer. This can result in double taxation if their home state doesn’t offer tax credits for taxes paid to other states.