[court10482]

I own a home in Maryland - and my wife resides in Maryland and works there.

Christmas 2012 I was sent on 6 month temporary assignment to Alabama. In June, I was then sent on another 6 month temporary assignment to Tennessee. This means that during 2013 I will not work in Maryland at all.

Question 1: Which state(s) do I pay state income taxes to?

Question 2: I receive a per diem for living expenses as I must maintain a 2nd residence and lifestyle while in these states - is this taxable income? I received $2300 a month when in Alabama and $2000 a month when living in Tennessee - in addition to my salary.

I have to submit this form to my employer - should I mark YES or NO?

I am incurring duplicate living expenses due to this assignment and I believe that my "facts and circumstances" support that my assignment will be treated as a "temporary" assignment for tax purposes, and that any payments or reimbursements for temporary assignment travel expenses should not be reported as taxable income or subjected to income tax or other payroll tax withholdings.

YES_____(Nontaxable) NO_____(Taxable)

Question 3: My wife and I filled our taxes jointly in 2012 for the first time. We are not sure which is the best way for 2013 as we are working / residing in separate states. Thoughts?

[AtlantaTaxExpert]

1) You need to pay income taxes to Maryland as your home state and Alabama as the state where you worked. Tennessee has NO state income tax. You will claim a tax credit for the taxes paid to Alabama on your Maryland state tax return.

2) Your situation meets the criteria for being temporary work assignments, so the per diem is NOT taxable as long it you can submit expense reports to so your expenses meet the per diem payments.

3) File jointly. The only return on which it will be an issue is the Alabama return, and your tax preparer should be able to handle that. If not, get another preparer who CAN.