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Corporate Housing on Long term Assignments

Hello

I have an employee who lives in corporate housing and on a long term assignments in PA. Should this be taxable income?

Comments

  • Are expenses taxable if an employee only works one or two days a week at the same location over one year? He's still working most days out of his home base. Is there a threshold of weekdays worked that make this a long term assignment, and therefore the company paid expenses become taxable?

    Where does the line between business travel and long term assignment get crossed?

    Thanks.
  • Are expenses taxable if an employee only works one or two days a week at the same location over one year? He's still working most days out of his home base. Is there a threshold of weekdays worked that make this a long term assignment, and therefore the company paid expenses become taxable?

    Where does the line between business travel and long term assignment get crossed?

    Thanks.
  • Tax Home

    To determine whether you are traveling away from home, you must first determine the location of your tax home.

    Generally, your tax home is your regular place of business or post of duty, regardless of where you maintain your family home. It includes the entire city or general area in which your business or work is located.

    If you have more than one regular place of business, your tax home is your main place of business. See Main place of business or work , later.

    If you do not have a regular or a main place of business because of the nature of your work, then your tax home may be the place where you regularly live. See No main place of business or work , later.

    If you do not have a regular or main place of business or post of duty and there is no place where you regularly live, you are considered an itinerant (a transient) and your tax home is wherever you work. As an itinerant, you cannot claim a travel expense deduction because you are never considered to be traveling away from home.

    That is from pub 463 -
    http://www.irs.gov/publications/p463/ch01.html#en_US_publink100033754

    There is more there that you will need to look at to get the answer to your question - but David gave you good advice. It is not that we are not being helpful, but he told you where to look and then was asked this question
    Where does the line between business travel and long term assignment get crossed?

    Telling you where to look is sometimes better than telling you what we think the answer might be - we don't have all the facts - AND if we said something like "tax home" without realizing you did not know what that was, there could be a real misunderstanding on either or both sides of the conversation. And our answer would be the same as what is in Pub 463, just not as complete and possibly not correct if the facts were not as understood.
  • pfdtx, in the future, please start your own thread with your question, instead of hijacking one over a year old.

    thank you.
  • Opps -
    Thought I was responding to the OP - Thanks pattypa -
    Did not mean to be ungracious - but David's referral is still good.
  • :oops: Sorry for the breach in etiquette. I'll start a new topic for future posts.

    Thank you David and Patrick for your response.

    I'm sorry I wasn't very concise with my question. I do know the employee's tax home, he lives and works in San Francisco 4 weekdays / week. He travels to and works at a job site in Los Angeles 1 weekday / week.

    The Pub 463 examples for temporary / indefinate assignment only speaks to an employee working away from their tax home for months at a time. This employee only works away from his tax home 1 day at a time, but will work away from his tax home one day a week for over a year.

    Is this an indefinate assignment requiring imputation of expenses as income?

    Thanks again! :D
  • Not so much a breach of etiquette as misunderstanding on our part which can lead to some undesirable consequences from your stand point - one would be my unnecessary snarkyness- unlike pattypa, I don't check to see who posted or when, so I mistook your later post for a followup to a current question by the same original poster (OP). The other, probably more important because you seem to be able to deal with misaimed snarkiness, is that you question may not get the attention it deserves because it it buried in the middle of a thread by someone else whose question has already been answered. Some members of the board don't look at new posts to old questions or at questions on particular topics (the subject of the OP may not be what your question is actually about) - so your response pool becomes limited.
    Is this an indefinate assignment requiring imputation of expenses as income?
    No, because the duration of the assignment is not relevant when the work location is not otherwise a tax home. Your employee works four days per week in city A, and one day a week in city B. City A is the tax home, Even if the one day per week assignment is indefinite, City B is still travel away from the tax home. because it is not the tax home.

    Let's change it a bit. Employee's tax home is City B, but employee is on three month assignment working 4 days per week in City A and one day in City B - City B is still the tax home because the four days in City A is a temporary assignment. Change again - same facts except the employer does not know how long the employee will be assigned to work 4 days per week in City A - City A is now an indefinite assignment and becomes the Tax home immediately (even if the assignment ends up lasting less than a year). However, travel to City B is now travel outside the tax home.

    In both cases, the employee's family home remains in City B and employee stays in a motel for 4 nights per week in city A. For the three month assignment, the cost of the hotel is qualifying travel. In the indefinite case, the four motel nights are non-deductible personal expenses (living in tax home), but some of the cost of living in family home in City A may be qualifying travel. If you are going to do that, it might be best to pay on a per diem basis (grin).
  • David and Patrick, THANK YOU SO VERY MUCH! The examples you've given are exactly what I was looking for.

    You've both been a tremendous help to me. :mrgreen: