Michigan resident travels to CA for Job 15 days a month.

[Hamacher]

We have a client that is a Michigan resident but just accepted a job in CA. She will be traveling back and forth to CA for her employment. Her husband and 5 kids will remain in Michigan. She will also work in Michigan a few days a month. She wants to know if there is a way to deduct her travel expenses as an unreimbursed employee expense. Any thoughts?

[TAXNJ]

Travel

You may want to read TTB tax 13 pages 8-10 to 8-13 for more information AND examples.

(not all inclusive - source:TTB page 8-10)

Away from home. A taxpayer travels away from
his or her tax home if:
• The taxpayer’s business duties require an absence
from home that is substantially longer than a day’s work, and
• The taxpayer needs to sleep or rest to meet the demands of
work while away from home. Merely napping in a car does not
meet the rest requirement. However, absence for an entire day
or from dusk until dawn is not required as long as relief from
duty is long enough to allow for necessary sleep and rest.

IN ADDITION -(not all inclusive - source:TTB page 8-11)

Temporary travel. The determination of whether a job location is
temporary or indefinite is made when work at the location begins.
A job that is expected to last for one year or less is considered
temporary until facts and circumstances indicate otherwise.
Temporary assignment. An assignment in a single location is
generally considered temporary if it is expected to last (and does
last) for one year or less. The tax home does not change. The
taxpayer is considered to be away from his or her tax home for
the whole period, and qualifying travel expenses are deductible.
Indefinite assignment. An assignment in a single location is
generally considered indefinite if it is realistically expected to
last for more than one year, whether or not it actually lasts for
more than one year. If the assignment is for an indefinite period
of time, the job location becomes the new tax home, and travel
expenses are not deductible.

[Lion]

Without being able to ask your client any questions/see the letter offering her employment, it sounds like her new tax home will be in CA. Are her MI working days for her own convenience? Required by employer to service MI clients? Or, just personal travel to visit her family?

[Bees Knees]

IN ADDITION -(not all inclusive - source:TTB page 8-11)

Temporary travel. The determination of whether a job location is
temporary or indefinite is made when work at the location begins.
A job that is expected to last for one year or less is considered
temporary until facts and circumstances indicate otherwise.

There is no need to muddy the waters with any other rules or opinions or pages and pages of additional explanations. Clearly CA is travel away from the taxpayer's tax home in Michigan. So if that CA assignment is expected to last 1 year or less, you can deduct travel expenses. If the assignment has no end, or is expected to last more than 1 year, no travel expenses are allowed.

It is as simple as that.

[FEDUKE404]

Tax home is where ?

There is no need to muddy the waters with any other rules or opinions or pages and pages of additional explanations. Clearly CA is travel away from the taxpayer's tax home in Michigan. So if that CA assignment is expected to last 1 year or less, you can deduct travel expenses. If the assignment has no end, or is expected to last more than 1 year, no travel expenses are allowed.

It is as simple as that.

I see a greater issue in determining what the taxpayer's "tax home" is.

From the facts given ("just accepted a job in CA" and "will also work in MI a few days a month"), and absent any more information, I think a realistic case could be made that the tax home is now CA and not MI.

Relevant questions: 1) Is the CA employer the same as the MI employer? 2) If so, why is that employer not reimbursing some of these "necessary" temporary travel expenses?

If there are two (or more) employers, I could see some bumps in the road justifying the travel to/from CA as a "necessary business expense."

Just my 2¢ .

FE

[Bees Knees]

The original poster said she will still work a few days per month in Michigan, and that her family will continue to live there. That coupled with the question of whether or not the CA job is 1 year or less is all that is needed to determine her tax home remains in Michigan.

If no work were performed in Michigan and the CA job was indefinite, then those two facts could indicate the tax home shifts to CA.

[FEDUKE404]

Temporary or indefinite ??

The original poster said she will still work a few days per month in Michigan, and that her family will continue to live there. That coupled with the question of whether or not the CA job is 1 year or less is all that is needed to determine her tax home remains in Michigan.

If no work were performed in Michigan and the CA job was indefinite, then those two facts could indicate the tax home shifts to CA.

Since we cannot post links any more, there is a good explanation of scenarios in the IRS Publication we all grew up with and once had on our desk each year. Hopefully, there will be no complaints by my posting the following. (I chose not to take the time to look up the specific IRS regulation(s) involved.)

Example:

Your family home is in Pittsburgh, where you work 12 weeks a year. The rest of the year you work for the same employer in Baltimore. In Baltimore, you eat in restaurants and sleep in a rooming house. Your salary is the same whether you are in Pittsburgh or Baltimore.

Because you spend most of your working time and earn most of your salary in Baltimore, that city is your tax home. You cannot deduct any expenses you have for meals and lodging there. However, when you return to work in Pittsburgh, you are away from your tax home even though you stay at your family home. You can deduct the cost of your round trip between Baltimore and Pittsburgh. You can also deduct your part of your family's living expenses for meals and lodging while you are living and working in Pittsburgh.

In this case, more clarification is needed between exactly whether this is a "temporary" or "indefinite" assignment to CA. Also, my earlier question regarding whether the same employer involved is relevant (at least to me). From my perspective, I do see the scales tilting very heavily that CA becomes the tax home. (Granted, there is potential wiggle room re "temporary assignment" et al.) Otherwise, until more facts are available, I'm not sure a conclusive answer can be given at this stage. . .

FE

[Bees Knees]

The example you cited is example 2 from page 4 of IRS Pub 463 under the heading “Tax Home Different From Family Home.” (took me two seconds to find it….)

That example illustrates the rule cited above that says: “If you are working temporarily in the same city where you and your family live, you may be considered as traveling away from home. See example 2…”

That situation is not the same as the original poster, because in the IRS cited example, the temporary job is in the same city as the taxpayer’s family. The original poster has the temporary job in a different city than the taxpayer’s family.

[Hamacher]

Thanks

I just spoke to my client and it sounds like she has signed a 2 year contract. For that reason, sounds like she will be unable to deduct any of her travel expenses.

Thanks for the input!

[FEDUKE404]

Total confusion

The example you cited is example 2 from page 4 of IRS Pub 463 under the heading “Tax Home Different From Family Home.” (took me two seconds to find it….)

That example illustrates the rule cited above that says: “If you are working temporarily in the same city where you and your family live, you may be considered as traveling away from home. See example 2…”

That situation is not the same as the original poster, because in the IRS cited example, the temporary job is in the same city as the taxpayer’s family. The original poster has the temporary job in a different city than the taxpayer’s family.

Actually, the information that I provided is from the web version of the 2014 Pub 17, Chapter 26.

I know my bifocals can get cloudy at time, but in the referenced example are you saying Pittsburgh and Baltimore are the same city??

I'm outta here. Sounds like CA will be the new tax home, per the OP.

FE

[TAXNJ]

Fairness

The example you cited is example 2 from page 4 of IRS Pub 463 under the heading “Tax Home Different From Family Home.” (took me two seconds to find it….)

That example illustrates the rule cited above that says: “If you are working temporarily in the same city where you and your family live, you may be considered as traveling away from home. See example 2…”

That situation is not the same as the original poster, because in the IRS cited example, the temporary job is in the same city as the taxpayer’s family. The original poster has the temporary job in a different city than the taxpayer’s family.

There is no need to muddy the waters with any other rules or opinions or pages and pages of additional explanations..

My prior reply post info was from TTB to give the Original Poster information and a guide that maybe relevant to their post. Similar to your valid contribution post of additional explanations above from the IRS.

Think the brief explanation from TTB would be appropriate and allowed for us to reach the same goal of addressing the Original Post.