Millions of Americans worked remotely last year due to the pandemic, and many of them worked from states different from their employers. Others around the country chose to work from vacation homes or relatives' homes during the crisis. Tax experts say a lot of taxpayers in those situations are in for a paperwork nightmare and possibly double taxation, because of differing rules in different states regarding how in-state income is defined.

With the likelihood that some level of remote work will stay with us permanently, some are calling for a federal remote-work law to iron out the tax inconsistencies between states. It's worth exploring.

Of all the ways the pandemic has changed American life in the past year, the mainstreaming of work-from-home culture has been among the most profound. The rise of the internet and related technology, along with increases in freelance or "gig" employment, has for years been driving more and more Americans to work remotely, but they remained a relative sliver of society until the coronavirus struck. By mid-2020, that sliver had grown to a majority of the workforce.

Employers who had long hesitated to give up the control offered by an office setting suddenly had no choice. Most indications are that both they and their employees have been pleasantly surprised by the outcome. Though many employees have since returned to the office at least part of the time, virtually no one expects in-office work to snap back to the overwhelming norm that it used to be. For better or worse, remote working seems to be here to stay.

Americans have gotten used to pandemic-year Zoom meetings, kitchen-table offices and the rest. But many have yet to file their pandemic-year taxes. For those who have worked remotely from a state different from their employment headquarters, surprises may be coming.

Some states require people to pay tax on any money they earn working within the state for even a day, while others allow months-long grace periods. Variation in policies means that when employees work from home in a different state from the office, the two states might "make competing claims to their paychecks," as a recent Bloomberg piece put it. Vermont went so far as to warn employees of New York-based offices that any income earned in Vermont vacation homes for two weeks or more "is Vermont income" — regardless of how New York might see it.

There are already rumblings among tax experts and others about the need for consistent national standards that all state income tax systems would agree to follow on how to tax work-at-home income. Those calls are likely to grow as many Americans find themselves caught in a taxation vortex created by what will, to some extent, continue to be the new way America works.

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