IRS deems per diem taxable after being in a 50 mile radius for a year,A significant break restarts the calendar year,not defined but at least 3 weeks what is code is it

[lincolnhester88]

I am a traveling therapist and my employer pays me per diem as I am away from my tax home during my contracts, usually 13 weeks at a time. My employer had me in town A starting on 03/05/15 through 03/14/15 which is 100 miles away from my home. I then had a new contract in town B on 03/16/15 through 06/13/15. Town B is 120 miles away from town A and 120 miles away from my home. On 6/15 I started a new contract in town C which is 90 miles from my home and 30 miles from town A. It is my understanding of IRS code that per diem is taxable if I am in an area for 1 year. It is also my understanding that the calendar year starts new with a significant break in time. The IRS does not specify what a length of time is but says more than 3 weeks. I had a 13 week break between town A and town C. Does my per diem calendar year for town B start on 06/15/15 and go for 1 year or is my per diem in town C considered taxable on 03/05/16? If the letter towns are too hard to follow I would be happy to give the names of the towns. thanks "

[TaxGuyBill]

Are you sure you have a tax home?  Do you usually work in one place?  If you are continuously traveling, you may not have a tax home.
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[bwa · Accepted solution]

IRS deems per diem taxable after being in a 50 mile radius for a year

I believe you're misreading that.  The GSA (for the entire Government) and the IRS apply a 50 mile radius, but that standard is for reimbursing their employees for travel costs.  It has nothing to do with tax law and when reimbursements are taxable.

It is my understanding of IRS code that per diem is taxable if I am in an area for 1 year

Not quite.  Perdiem is taxable if, when the engagement begins, you are reasonably expected to be there for more than one year, even if the assignment ends early.  If, for example, you anticipate it to be a permanent assignment but it ends in three months, the perdiem is taxable because you expected to be there more than one year.

As Bill indicates, there is also a problem with continuous traveling, resulting in no tax home, and as a consequence no tax free perdiem. You should take the time to read the two paragraphs under What is an ?IRS Tax Home?? at this site ( http://www.travelnursing.org/understanding-your-travel-nurse-pay-package/ ) which is written specifically for traveling nurses.