Per Diem

[aodan]

What is the name of your state? Tennessee
I just moved to TN from UT for a contractor job with a company based out of TN. Since I got the job while in UT, they hired me on at a per diem rate. I'm wondering if, since I moved to TN, I should be setting money aside for taxes or if I should even worry about it. My employer told me that I shouldn't worry about it; that I can stay per diem even though I moved 30 mi away from the city they're based out of.

[LdiJ]

Originally Posted by aodan

What is the name of your state? Tennessee
I just moved to TN from UT for a contractor job with a company based out of TN. Since I got the job while in UT, they hired me on at a per diem rate. I'm wondering if, since I moved to TN, I should be setting money aside for taxes or if I should even worry about it. My employer told me that I shouldn't worry about it; that I can stay per diem even though I moved 30 mi away from the city they're based out of.

Do you mean that they are paying you as an employee (withholding taxes and you will receive a W2 at the end of the year) but they are giving you per diem to cover expenses because its a temporary job?

Did you temporarily move to TN, or did you truly "move" there? Do you still have a home in UT?

If not, please explain the scenario more fully, because that seriously matters.

[aodan]

I have a place in UT that I can claim as a home but I don't live there anymore. I've made the move to TN and don't plan on moving back. They are paying me as an employee by withholding taxes and giving me a W2 at the end of the year. The per diem is because I was hired on while living in UT even though I fully intended to move to TN.

[LdiJ]

Originally Posted by aodan

I have a place in UT that I can claim as a home but I don't live there anymore. I've made the move to TN and don't plan on moving back. They are paying me as an employee by withholding taxes and giving me a W2 at the end of the year. The per diem is because I was hired on while living in UT even though I fully intended to move to TN.

In that case, the per diem really is taxable, and/or they shouldn't be giving it to you. They may not treat it as taxable, but that would be an error on their part. I would recommend that you set money aside to pay the tax, because I suspect that they will discover their error.

The per diem would be valid if you were remaining a UT resident on temporary assignment in TN, assuming that the temporary assignment lasts less than a year. However, since you made a permanent move to TN, that is not the case.

[aodan]

When you say they, I assume you mean the company that I work for and not the IRS. The company told me not to worry about the Per Diem, that it might be changed in about six months but that it's not a big deal.
If your advice is to save up money, I think that's what I'll do. 30% of my income is a good figure, right?

[LdiJ]

Originally Posted by aodan

When you say they, I assume you mean the company that I work for and not the IRS. The company told me not to worry about the Per Diem, that it might be changed in about six months but that it's not a big deal.
If your advice is to save up money, I think that's what I'll do. 30% of my income is a good figure, right?

Yes, that's a nice, safe figure to use....and yes, I did mean the company that you work for.