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chowdmouse · Nov 7, 2006, 03:05 PM

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

AtlantaTaxExpert · Nov 7, 2006, 04:54 PM

CM:

Your friend is correct about the tax implications, or at least he would be if you had an apartment 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.

chowdmouse · Nov 7, 2006, 08:12 PM

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

Originally Posted by AtlantaTaxExpert

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.

AtlantaTaxExpert · Nov 8, 2006, 05:02 PM

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.

weitings · Mar 2, 2010, 05:57 PM

Originally Posted by AtlantaTaxExpert

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.

So, you may need to pay taxes if the per-diem IS accountable? Or if it's NOT accountable?

I'm pretty much in the same boat as the OP, except that I live in a hotel... but for 2-4 weeks at a stretch. My out-of-state project is approaching the 2-year mark... so I'm starting to worry. Do I need to file out-of-state taxes?

(Found this thread while googling... looks like the tax expert is still actively answering questions around here... Thanks!)

AtlantaTaxExpert · Apr 26, 2010, 01:47 PM

In my opinion, you ARE liable for state income taxes in the state where the 2-year project is located.

If the per diem is accountable, it is not taxable. If it is NOT accountable, it IS taxable.

artlaunier · Jun 7, 2011, 11:09 AM

Like many in the IT field, I have a job that is out of state.

I fly out on Sunday and fly back on Thursday and work out of my home office on Friday. All of my travel expenses are detailed and submitted for reimbursement.

I am an independent living in GA, contracted to a company in NJ, who subcontracted me to a company in IL, who subcontracted me to their client in MI, whom I am doing the work for in OK. Yea, confusing isn't it.

I have been on the job for 6 month in 2010 and will be on the job for 7 months in 2011.

I paid my 2010 income tax to GA and will submit my 2011 income tax to GA. All my travel expenses are accountable, with receipts and submitted to the company in NJ for my reimbursement.

Do you see and tax problems with the way I'm it?

AtlantaTaxExpert · Jun 7, 2011, 02:37 PM

You are correct in filing the Georgia tax return, because that is your home base.

However, you also owe taxes to Oklahoma, because the work was performed in Oklahoma. You would claim a credit on your GA return for the Oklahoma taxes paid.

RCNorfleet · May 12, 2012, 10:59 AM

I am an Engineering Consultant and my home is Pennsylvania. I've been put on assignment in Kentucky for seven months. I receive a per diem check bi-weekly; it is less than the federal max for the county. Rather than corporate housing I got an apartment, and rented furniture (some I purchased some appliances).

My monthly / weekly expenses are less than the daily per diem allowance from my company. Also I prefer to cook rather than eat out, so I don't generate many M&I receipts.

I am concerned how to deal with the taxes, because the per diem I don't spend I think, should be reported as income.

Other than receipts what other info should I be keeping?

AtlantaTaxExpert · May 12, 2012, 05:21 PM

Are you submitting periodic expense reports, or just being paid per diem?