• LinkedIn
  • YouTube
  • Twitter
  • Facebook
  • Google+

No tax-free reimbursement for a long-distance commute

by on
in Office Management,Payroll Management

Question: An employee lives in New York, but commutes to our offices in Maryland every week. He returns home on Friday. We are contractually obligated to reimburse him for his weekly hotel/housing expenses. Are his reimbursements taxable, or do they qualify as tax-free local lodging expenses?

Answer: These expenses are taxable. The critical consideration is where the employee works (called the tax home), and not where he lives. The employee’s tax home is in Maryland. His Maryland living expenses, therefore, are personal expenses, which can’t be picked up tax-free. The local lodging exception doesn’t apply because it applies to employees who aren’t traveling away from home and is limited to five days per calendar quarter.

Like what you've read? ...Republish it and share great business tips!

Attention: Readers, Publishers, Editors, Bloggers, Media, Webmasters and more...

We believe great content should be read and passed around. After all, knowledge IS power. And good business can become great with the right information at their fingertips. If you'd like to share any of the insightful articles on BusinessManagementDaily.com, you may republish or syndicate it without charge.

The only thing we ask is that you keep the article exactly as it was written and formatted. You also need to include an attribution statement and link to the article.

" This information is proudly provided by Business Management Daily.com: http://www.businessmanagementdaily.com/36627/no-tax-free-reimbursement-for-a-long-distance-commute "

Leave a Comment