My husband is being paid from his company to stay in an apartment out of state to work on contract work that may last around 2 years or more. He is being paid 1200.00 a month and the rent is 1150 not including the electric, water, trash and cable. This money is deposited into our account separate from his earnings. How do I report this money?

In the FIRST year, it is reimbursement of expenses and is NOT taxable.

After that first year, however, it becomes compensation the job is no longer considered to be temporary by the IRS.