FEMA money paid for services not taxable?

[Super Mom]

My son and husband are telephone technicians. They have been told by some contractors that they can go to Texas and work (for a lot of money) paid by FEMA. The contractors are saying is tax free. I know that FEMA disaster assistance is tax free but doesn't make sense that money paid for services is not taxable for the provider of the service. Texas doesn't have a state income tax, and that MAY be what they are reffering to. But I see no reson this would not be taxable for federal for the provider of the service.

Anyone know something I don't?

[spanel]

My son and husband are telephone technicians. They have been told by some contractors that they can go to Texas and work (for a lot of money) paid by FEMA. The contractors are saying is tax free. I know that FEMA disaster assistance is tax free but doesn't make sense that money paid for services is not taxable for the provider of the service. Texas doesn't have a state income tax, and that MAY be what they are reffering to. But I see no reson this would not be taxable for federal for the provider of the service.

Anyone know something I don't?

Also, just because it would not be taxable to Texas, doesn't mean their home state wont tax it (they will).

Chris

[Kram BergGold]

The key words

"They have been told". At this point, in regard to taxes, you know what follows is incorrect.

[taxea]

Also, just because it would not be taxable to Texas, doesn't mean their home state wont tax it (they will).

Chris

It is taxable federally no matter what state they are from. What "they" probably meant is that the income is not taxable by Texas because Texas residents do not pay state income tax.

[ATSMAN]

it is Taxable income!

A good friend of mine spent almost 6 months in LA after Katrina rebuilding and the income from that project was fully taxable like any other income. Because the project lasted less than a year, it was considered a "temporary" work location and certain travel expenses and lodging was deductible.