Many RVers, and those who Workamp in particular, work in multiple states during the year. How does that impact filing your taxes?
The biggest factors to consider when you travel and work are the following:
- Domicile
- Physically working in a state
- Length of time spent in each state
Domicile
Domicile is important because it’s where you claim as your resident state. Your domicile should issue your driver’s license. It should be where you have your RV registered and insured. Domicile is where you have ties for tax purposes. This is why many RVers choose income-tax-free states.
Physically working in a state
Next up, consider if you’ll be physically working in a state or not. Examples of this would be:
- working full-time in a fulfillment center for a couple months
- working at a campground in the office or doing maintenance for a season
- travel nursing where you go into a hospital or clinic
- an electrician who goes to a job site
These are all jobs that need you to be physically present to get the work done.
Pretty much all of these jobs should be paying you W-2 wages. This would be in a weekly, bi-weekly, or monthly paycheck regardless of whether it’s salary or hourly. It’s still W-2 wages.
In January, you’ll receive a W-2 for each employer that you worked for during the year. State taxes most likely were withheld from your pay, so you’ll need to file in that state to know whether you receive a refund or owe more taxes.
Most of the time you file a nonresident tax return in the states in which you worked as a Workamper. This also means the only income that should be taxed by that state is the income you earned while physically working there.
Let’s look at an example:
You spend the summer in Montana working at a campground from May through September. You earn $10,000 during your time there and had state taxes withheld from your paycheck. You’ll need to file with the state of Montana as a non-resident even if you claim an income tax free state as your domicile.
Time spent in a state
The last factor is the amount of time spent in one state. If you spend more than half the year or over 180 days in one state, then you might need to file a resident tax return there. This is sometimes called a statutory resident. Look up the state laws or get help from a tax professional if you think this might apply to you.
California, Massachusetts, New Jersey, and New York are particularly aggressive in this respect so be aware if you’ll be working in any of those states. In this situation, you’ll be required to file a resident tax return versus filing as a non-resident.
If you’re still not sure if you need to file taxes in a state, reach out to a tax professional to help you.
by Heather Ryan, The Tax Queen – tax-queen.com
An Enrolled Agent since 2014 and RVing since 2016. “My mission is to eliminate the confusion, worry, and struggle so many digital nomads feel about their taxes. It really is possible to feel secure and confident that you’ve got your finances in order—without spending countless hours staring at a screen. I’ll show you how.”
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