@brdrokm wrote:
I'm a W-2 employee.
My first contract was in Connecticut and started 4/16/2023.
Had two weeks off from 7/17-7/31. Renewed the contract to stay at the same facility, took another week off from10/14-10/21.
Finished that contract 11/4, started a new one in the same state, but 50+ miles away. Am scheduled here until 2/3/24, was planning to take two weeks off, then return to work at the same place on 2/18, for another 13 weeks.
I've read that all of the stipend money would become retroactively taxable, obviously hoping to keep as much as possible. Would like to renew this contract here, but may have to reconsider if it means having to pay so much back. Thanks
Looking only at the paper you signed and not your intentions, you will have been away from your "tax home" (see publication 463) for less than 1 year up through the end of your current contract on 2/3/24. Once you start the next contract, with a planned end date after 4/16/2023, your assignment is no longer temporary, and any travel supplement that is included with the 4th contract must be included in your W-2 taxable wages. However, this does not make your previous travel supplements taxable.
Looking at your expressed intention to stay in Connecticut past 4/13/24, Connecticut is your new tax home now, and all your travel supplements from the day you made that decision going forward, must be included in your taxable income (whether you made that decision today, or last week or whenever, you should notify your employer to start considering the travel money taxable from that date). However and once again, previous travel money (when you still expected the assignment in Connecticut to be temporary) don't become retroactively taxable.
Whether you file your taxes based on what is put down on paper, or what is in your mind, is up to you.
