Living Expenses Paid by Company

[Diane]

A potential client called. He permanently lives in Florida, is in Maryland on a job. The job started in 2007. The company paid his living expenses in 2007 and did not include on the W2. Which, I believe, was correct since the job was supposed to be Temporary. He is still working in Maryland (worked all of 2008). The company paid his living expenses and put on his W2. He thinks he should be able to deduct these expense on a 2106 (he heard from a friend in Florida). My take on this is that his tax home has changed to Maryland; therefore, he cannot deduct any living expenses while here.

Am I thinking corrrectly?

Diane

[Kea]

I believe you are correct. However, you may be able to take a few months of living expenses up until the point when the job location was no longer deemed "temporary."

[imjulier]

I concur w/ KEA. Anything over a year becomes permanent and expenses aren't deductible. I'd think twice about it though if there was a written employemnt agreement calling for a year (or less) and then it was extended for a limited time of less than a year, again in writing.

[kcjenkins]

I'd be strongly influenced by the way the company handled it, since clearly they understood that if they continued to pay his expenses over a year, it had to be added to his W-2. Since they did that, clearly they understood that it had become an indefinate time assignment. He should just be happy that they still are paying it, IMHO.

[Diane]

Thanks everyone. It helps to have someone else to talk to when these situations come up.

Diane