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Level 1
January 5, 2026
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Can per diem still be legally tax free if the job is in the same location for more than 12 months

  • January 5, 2026
  • 1 reply
  • 5 views
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Best answer by Opus 17

No.  see publication 463. 

https://www.irs.gov/forms-pubs/about-publication-463

 

If you are a W-2 employee, your employer can reimburse you for travel expenses for temporary assignments.  In this case, "travel" means far enough away from your usual home that an overnight stay is required.  "Temporary" means that the work is expected to last, and actually does last, less than a year.  Even if the assignment is expected to last less than a year, as soon as you hit that one year mark, it is no longer eligible for tax-free reimbursement, and if the company does help pay for expenses, the money must be added to your taxable wages and is subject to regular income tax and social security and medicare tax.  

1 reply

Opus 17Level 15Answer
Level 15
January 5, 2026

No.  see publication 463. 

https://www.irs.gov/forms-pubs/about-publication-463

 

If you are a W-2 employee, your employer can reimburse you for travel expenses for temporary assignments.  In this case, "travel" means far enough away from your usual home that an overnight stay is required.  "Temporary" means that the work is expected to last, and actually does last, less than a year.  Even if the assignment is expected to last less than a year, as soon as you hit that one year mark, it is no longer eligible for tax-free reimbursement, and if the company does help pay for expenses, the money must be added to your taxable wages and is subject to regular income tax and social security and medicare tax.