Temporary Assignment - Overview 

A worker may deduct the expenses of traveling away from home in pursuit of a trade or business under section 162(a)(2) of the Internal Revenue Code (the Code). These expenses include not only transportation, but also lodging and other costs incurred. If the expenses are advanced or reimbursed by the employer, those amounts are not included in income by the employee, and are not subject to employment taxes, provided that the arrangement meets criteria established in section 62(c) of the Code.

As a general matter, for travel expenses to be deductible they must meet the following basic conditions: (1) they must be ordinary and necessary; (2) they must be incurred while "away from home" overnight; and (3) they must be incurred in pursuit of a trade or business.

The law provides that if an assignment exceeds one year, it is not temporary and no deductions are allowed.

The foregoing is intended as general information only. Regarding your specific situation, Worldwide ERC® suggests that you consult with your own tax or legal advisor as appropriate.

For reprint information contact: GovernmentRelations@WorldwideERC.org