Independent contractor work-QBI ??

[artp]

Taxpayer (Medical doctor) has worked as an independent contractor in CA for Echo Locum Tenens (a staffing provider) since July 2017.  He received a 1099-MISC with the income reported in box 7- non-employee compensation. The contract requires his services for 6-month stints from July-Dec for 2017 and 2018 to perform services at a hospital I CA. For the remaining 6 months each year he was required to work overseas at a hospital in Libera under the HEAL UCSF Global Health Fellowship. For this work he received a W-2 from UCFS. When he returns from Liberia in July 2019, he will finish his last 6-month requirement for Echo Locum Tenens under the current contract and be paid on the 1099-MISC. He expects to continue this working relationship going forward.

 

Question: Does his work as an independent contractor qualify for QBI?

[BHoffman]

I vote yes and he would be considered an SSTB.

[artp]

Yes. His income is below threshold.

 

Related questions:

Can he deduct travel expense for periodic trips from CA to his home in IL?

What about rent payments for temporary living accommodations while working in CA?

[Lion EA]

Is his tax home in CA? Then, no.

[artp]

That is difficult to say definitely. He has lived in IL all his life. After he completed his medical residency in IL in 2017 he entered into this contractual agreement working in LIberia from Jan-Jun each year and in CA from Jul-Dec.   He still maintains his house in IL, pays his mortgage there and still maintains IL drivers license, but has not spent hardly any time there. He has split his time between CA and Liberia. If we treat his tax home as IL, then we have no IL source income to report since he worked in CA for part of the year and in Liberia for the other half, but if we report him with CA tax home, then no expense deduction for living accommodations while working temporarily??  in CA??. Otherwise he has virtually no expenses to offset the income he has to report on Sch C for this contract work. 

[Gail in Virginia]

I don't think you can treat IL as his tax home.  It might be his home, but his tax home is going to be either CA or Liberia, or first one and then the other, IMO.  Unless this contract is expected to last for a year or less. Then maybe it could be considered temporary. 

[Lion EA]

His tax home is where he earns his living. It sounds like CA. Or, an itinerant. (If his tax home were IL, ALL his worldwide income would be reported to IL, his CA income to CA, and a credit for taxes paid to CA on his IL return. But, I don't think his tax home is IL.) And, it's not sounding like temporary, if each contract is for a year. He should have talked to you BEFORE signing a contract. We cannot fix these things after the fact.

[BulldogTom]

@artp I think I told you domicile would make this return tricky.   I hope you are getting paid handsomely for this?

As for QBI - Yes if he is under the threshold because he is SSTB.

Tom
Modesto, CA

[Christian]

Are you filing a Schedule C for him ?

[artp]

Yes we have to file Sch C with income reported on 1099-MISC box 7 and contract he signed.