Hello,

I'm a IT consultant working for a company (i.e. I'm just a cog in the Man's machine, not an independent :D ) I'm currently on a long term project in another state. I generally fly in on Monday and fly out on Thursday and work from home on Friday. I get a per diem for food and reimbursed for other expenses (car rental, airfare, etc.) Recently a colleague brought up the fact that since we're approaching our 1 year anniversary on-site (he seemed to think that was some sort of milestone date) there might be federal or state tax implications. I'm checking out a few different sources (HR department, IRS.gov, etc.) and thought I'd post a question here as well. If anyone can give me some information regarding this, I'd appreciate it.

Cheers,
CM

CM:

Your friend is correct about the tax implications, or at least he would be if you had an appartment in the other state. The IRS only considers work assignments of less than a year as "temporary".

However, the fact that you travel in on Monday, stay (I presume) in a hotel, then fly out on Thursday supports that this assignment is in fact a true temporary assignment.

You MAY have to pay taxes on your per diem (depends on whether your employer's reimbursement plan is accountable or non-accountable).

Other than that, you should have no problems.

Thanks for the note ATE.

I have actually been staying in a corporate apartment which is billed directly to my employer, but as far as I can tell from some IRS information I've found my "tax home" is still the state where my wife and I live. Does the corporate apartment (vs. a hotel) make a difference?

Regarding the per diem, I'll ask about the accountable or non-accountable nature of it, but can you explain the difference between the two?

Regards,
CM

CM:

Your friend is correct about the tax implications, or at least he would be if you had an appartment in the other state. The IRS only considers work assignments of less than a year as "temporary".

However, the fact that you travel in on Monday, stay (I presume) in a hotel, then fly out on Thursday supports that this assignment is in fact a true temporary assignment.

You MAY have to pay taxes on your per diem (depends on whether your employer's reimbursement plan is accountable or non-accountable).

Other than that, you should have no problems.

The corporate apartment is the same as a hotel in the eyes of the IRS.

An accountable plan requires you submit expense reports to get reimbursed. An non-accountable plan just pays you a per diem amount.