| |
You are here: Experts > Business > Corporate Law > Tax Law (Questions About Taxes) > Regarding per diem
Expert: Helen P. O`Planick, EA
Date: 8/28/2008
Subject: Regarding per diem
Question
QUESTION: Hello,
We are a staffing company, contracting our TN visa Canadian employee to a client 30 miles from our head office for about one year. He has no other residence in USA, he lives in an apartment where he is put up for the project. Can we pay him per diem based on that area's rates? Is he eligible irrespective of the period of assignment and the fact that he is put up in residential complex there and not a commercial (like hotel, etc). Please let me know.
Many Thanks.
-Meena
ANSWER: First, I'm assuming you are in the US. If not, I can't help you. How long is the job supposed to last, about a year isn't good enough to get a proper answer. Is it less than a year or a year or more?
Helen, EA in PA
---------- FOLLOW-UP ----------
QUESTION: Yes, we are in US. The jobd is of 11 months duration initially. Then again extendable. Will he be eligible? Also, is it possible for him to show his Canadian address as base address and his client side apartment address as home away from home?
Answer
The address thing - sure. The perdiem, as long as the job is less than a year (not in reality, but truly), his perdiem is not taxed.
HOWEVER, the second the job is found to go a year or more (and if it is the first day he is on it that you find out the job will be 365 days (and it is not a leap year), then his perdiem is taxable income to him in full, so it basically turns into wages.
Helen, EA in PA
Add to this Answer
Ask a Question
|
|
