asacimesp

Hey everybody... I'm aware the interwebs might not be the best for tax advice but i'll give it a shot anyways. I know you can claim the difference between the standard/city rate for overnights on the line, but my airline assigns domiciles on day 2 of orientation... Can I make city rate claims for orientation/indoc/systems/sims which were all "out of base"???

Toonces

Yes - sort of. If you are an employee, you can claim it. If you are not legally an employee yet, you may be able to argue for it as a job training/job hunting expense. Record everything appropriately and discuss it with your cpa.

sailingfun

Does your airline assign you to a base on day 2 or let you know where you will be based at the completion of training. If they are assigning you a base on day two they should start paying you per Diem that day and cover your lodging. You can however deduct expenses above what they pay you. Depending on the city it can be well above airline per Diem.

asacimesp

Yea you are an employee on day 1 and bases/equipment assigned on day 2. They do start paying per diem then as well.

flybywire44

If you are not based where you flight train than you can deduct that period as if it were a regular layover.

rickshaw

If you are 'categorically' based in the training city with company paid lodging and no per diem, could you argue that your per diem deficit is the 100% of the GSA rate for the duration of training? real base is not assigned until completion.

Blackwing

Anybody wanna take a stab at Rickshaw's question?

Adlerdriver

I'll try.

Start with the basic tenant that your base is your official place of employment. Your choice to commute is not relevant to this discussion. As far as the IRS is concerned, you have an address in a specific city that is your place of employment on day one. If your company assigns bases at the end of training, then until then, you work in the city in which you are hired and do your training. Once you get your assignment and are officially based there, then that becomes your place of employment. So, in this case, no per diem deduction.

The folks (like asacimesp) that get their base assigned on day two would be in a very different situation. From that point forward, they could claim 80% of the difference (not the whole difference) between the per diem they are paid and the amount for the same period figured using the government rate for the training city.

Not a CPA or tax expert - just very familiar with the subject.

Blackwing

Why 80%?

And if an employer is providing hotel accommodations during training but not perdiem, isn't that adequate evidence of not being "based" there? At other places I've worked, I was entitled to perdiem as long as I occupied temporary employer-provided housing.

Adlerdriver

Why 80%? You'd have to ask the IRS. Bottom line is: that's the rule. You can read for yourself in this 2014 pub 463 (page 35)
http://www.irs.gov/pub/irs-pdf/p463.pdf

The normal deduction is 50% of the difference for most people. Since airline pilots fall under the DOTs hours of service limits, we are allowed to deduct 80% of the difference.

As far as the hotel question...
You need to differentiate between the choices a particular employer may make regarding lodging and/or per diem and what the IRS procedures and rules are.

You have to work somewhere. If you have no reason to claim anywhere else, I would say that you work and are based where you are training (until you get assigned another base). The fact that an employer choses to offer lodging in the training city does not, by itself, prove you must be based somewhere else. In rickshaw's case, where would that be? He has no base assigned and he goes to work (for his new hire training) in city X. What possible justification would he have for claiming his base is somewhere else during that period?

When I worked for United, their training center was in DEN. They allowed locally based DEN pilots to use the company paid hotel during transition training if they desired. The fact that they were provided housing didn't somehow negate the fact that they were based in DEN.

Whether or not a company chooses to pay you per diem doesn't prove or disprove your basing claim. A company can pay an employee as little or as much per diem as they want. If they pay per diem to someone who is working in the city they are based, then those payments have to be treated as taxable income. If they pay it to someone working in a city other than their base, then it can be treated as non-taxable income. The company has specific reporting procedures and tax implications based on which method is used which you don't deal with. You just get a W-2 with the non-taxable portion reported in Box 12, code L.

After thinking about this a bit more, I'm editing to add one other thought. The per diem reporting procedures for the company require them to differentiate taxable from non-taxable per diem payments to their employees. The per diem payments are considered non-taxable (to you) when you are overnight away from your base. Therefore, if you were in training and received per diem that was reported as non-taxable by your employer on your W-2 in box 12, then I think you would have an excellent argument that your were not based in the city in which you received your training. Conversely, if all the per diem you received during training was taxed, then you can safely say that your employer considered you based in the training city.