Commuting Expenses - Air Flight between two locations

[Steve Stang]

I have a TP client who resides in MA which is also his tax domicile. He works for Tesla which has a location in MA and in CA. He travels between the two locations. From March thru December 2016 he stayed in CA (a total of 229 days). During this period he traveled back to his residence several times incurring air flight expenses. While back at his MA home he would also go to the MA location to work before a return flight to CA.

On page 10-4 of TTB, it talks about temporary work locations defined as "a work location that is expected to last ... for one year or less. Commuting from home to a temporary work location is deductible if the taxpayer has one or more regular work locations or the temporary work location is outside the taxpayer's tax home area."

Since the TP worked at the CA location for under one year and the location was clearly outside of his tax home state, can we deduct his air travel costs to get between the two states/locations?

Based on my reading of TTB it would seem the answer is 'yes'.

[ATSMAN]

I think you have to document the facts and circumstances because if it is a large deduction on 2106 it may trigger a desk audit.

[FEDUKE404]

Dealing with airline employees based in different cities

I had a potential tax return of this type several years ago. Client obviously maintained a residence (with family) in one state, but routinely/regularly worked out of another airport base on the other side of the country. I think his W2(s) showed income from at least two different states, and he was wanting to claim travel expenses out the yazoo. Airline personnel would go in together to rent an apartment/house in the "foreign" city and then base out of that "temporary residence" whenever in town.

I simply did not feel comfortable working through the learning curve to get things correct, so I passed on accepting the client. (I also sensed a bit of "slippery," or perhaps "rehearsed," responses that were being tossed my way.

There are web sites out there, specifically for airline personnel in such scenarios, telling them how to treat their income/expenses for federal/state tax purposes. You might want to do a web search to see if you can locate one of those.

Also, your post title shows "commuting" which may or may not be the issue. My guess is the major topic at hand is working in a (perhaps!) temporary work location.

Good luck. You will need it!

FE

[Gretel]

I have a TP client who resides in MA which is also his tax domicile. He works for Tesla which has a location in MA and in CA. He travels between the two locations. From March thru December 2016 he stayed in CA (a total of 229 days). During this period he traveled back to his residence several times incurring air flight expenses. While back at his MA home he would also go to the MA location to work before a return flight to CA.

On page 10-4 of TTB, it talks about temporary work locations defined as "a work location that is expected to last ... for one year or less. Commuting from home to a temporary work location is deductible if the taxpayer has one or more regular work locations or the temporary work location is outside the taxpayer's tax home area."

Since the TP worked at the CA location for under one year and the location was clearly outside of his tax home state, can we deduct his air travel costs to get between the two states/locations?

Based on my reading of TTB it would seem the answer is 'yes'.

My two cents:

If CA is indeed temporary - which I doubt since you also say Tesla has locations in CA, so this might be happening every year - you can take the first trip to CA and the last trip back home unless flying back home is less expensive then staying in CA.

However, if he does legitimate work in MA before going back to CA all home trips might qualify. If CA is his main place of work over the years, then CA might be his tax home. There are a number of facts we don't know.

[Steve Stang]

My client's not a flight attendant but I'll see if I can find those websites mentioned.

For CA state income tax purposes, he is a 'resident' though his main home and domicile are MA.

As mentioned, he has two W2s from the employer: one for MA and one for CA.

I think at the very least his initial flight out in March 2016 should count as a commuter expense as well as his last flight back to MA on December 31.

I guess I'm looking for guidance on any particular documentation, 'rules of thumb' or other tests that others may be aware of or used.

[Steve Stang]

My two cents:

If CA is indeed temporary - which I doubt since you also say Tesla has locations in CA, so this might be happening every year - you can take the first trip to CA and the last trip back home unless flying back home is less expensive then staying in CA.

However, if he does legitimate work in MA before going back to CA all home trips might qualify. If CA is his main place of work over the years, then CA might be his tax home. There are a number of facts we don't know.

As I noted elsewhere, I believe he meets residency requirements for CA. And after September 2017 it appears that Tesla CA will be his main work location and no longer 'temporary' as he's noted to me he expects it to be 'permanent'. So this tax question is also temporary ... for a TY2016 deduction only of airfares not his CA apartment rent, lodging, meals or auto.

[DonB]

Read up on "Tax Home" TTB 8-10. Determine his tax home and go from there. With 229 days in CA, MA could be the temporary location.
Read up on this topic in Publ. 463.

[ttbtaxes]

Were the trips out to CA a one-time thing or will he be going out there with some regularity?

[Lion]

Commuting is not a deductible expense.

You need to find out your primary questions -- probably what is his tax home -- and once answered, move on to any new questions that result from that.

[taxea]

If you take the air expenses I would caution you to be very sure that they are not commuting and to include a Statement of Facts in support of the deduction.

[Steve Stang]

Were the trips out to CA a one-time thing or will he be going out there with some regularity?

Instead of 'commuting expenses' I should be asking in terms of 'travel expenses'. And as best I can tell, his assignment per the firm was 'temporary' in 2016. He would travel back and forth with regularity and living in an apartment during the period.

[Lion]

229 days sounds like it could be his tax home. When did he find out it was not temporary? From that date forward, CA was his new tax home?

[Steve Stang]

229 days sounds like it could be his tax home. When did he find out it was not temporary? From that date forward, CA was his new tax home?

After he came home in January 2017. That's why I think that this would be a one-year deduction.

[Steve Stang]

Were the trips out to CA a one-time thing or will he be going out there with some regularity?

He would travel back to his primary residence once or twice a month from April to December 2016.

[Gretel]

After he came home in January 2017. That's why I think that this would be a one-year deduction.

Steve, there have been several posts pointing you to consider the actually CA is his tax home. Somehow I think this is something you do not want to consider.