Commuting and taxes from your domicile's state

[Lee D]

It has been a long time since I have commuted, so I am curious about what you guys who have commuted for awhile are seeing in the way of tax liability to the state to which you commute. Not taxation in your home state. Do you end up paying much if anything? For example I just started commuting to Denver from Utah. I’m curious to see if Colorado will try and take much in the way of taxes. And yes I will be consulting a tax advisor, I’m not basing my taxes on answers here, rather I just want to know what to expect. What do you guys/gals see? Thanks!

 

[jtrain609]

It has been a long time since I have commuted, so I am curious about what you guys who have commuted for awhile are seeing in the way of tax liability to the state to which you commute. Not taxation in your home state. Do you end up paying much if anything? For example I just started commuting to Denver from Utah. I’m curious to see if Colorado will try and take much in the way of taxes. And yes I will be consulting a tax advisor, I’m not basing my taxes on answers here, rather I just want to know what to expect. What do you guys/gals see? Thanks!

Michigan refunds any taxes you pay in another state.

 

[wheelsup]

You pay taxes based upon where you live most times not where your domicile is. Just have your HR department accurately list your address.

There are some localities that charge a tax if you are based there, PHL has some sort of thing, something like 1% IIRC, it's fairly small. I don't think it applies to pilots but to the mechanics.

 

[fish1260]

California will take income taxes from you if you work there. I heard you may be able to get out of it somehow, but I didn't look into it. I'm a poor RJ pilot, with zero tax liability so I got it all back anyways...

 

[drunkenbeagle]

Michigan refunds any taxes you pay in another state.

I had an employer a few years back that reported hours worked by each state I was physically in, and withheld income tax for each state I was physically in. I had to file 22 state tax returns. Some states (IL, NY, NJ, CA, CT) tried to fight tooth and nail to be able to tax everything I made that year.

 

[DE727UPS]

I don't know. I own property and work in Cali and they have left me alone, so far. There have been attempts to tax commuters in my domicile in the past but I don't think it got very far. Supposedly there are special tax rules for airline pilots.

"STATE OF CALIFORNIA
FRANCHISE TAX BOARD
FTB Publication 1031
Guidelines for
Determining
Resident
Status — 2008

Page 7"...

"Airline Employees
The wages of nonresident flight personnel (e.g. pilot, copilot, flight attendant) are not taxable by California unless more than 50% of the individual’s scheduled flight time is in California. If more than 50% of the scheduled flight time is in California, wages are apportioned to California based on the ratio of time spent in California to the total scheduled flight time."

I spend less than 50% of my time in Cali and less than 50% of my scheduled flight time is within Cali. You might have a problem if you're a Skywest EMB guy in Fresno and mostly just flew within Cali. Would be interesting to know.

 

[Lee D]

I don't know. I own property and work in Cali and they have left me alone, so far. There have been attempts to tax commuters in my domicile in the past but I don't think it got very far. Supposedly there are special tax rules for airline pilots.

"STATE OF CALIFORNIA
FRANCHISE TAX BOARD
FTB Publication 1031
Guidelines for
Determining
Resident
Status — 2008

Page 7"...

"Airline Employees
The wages of nonresident flight personnel (e.g. pilot, copilot, flight attendant) are not taxable by California unless more than 50% of the individual’s scheduled flight time is in California. If more than 50% of the scheduled flight time is in California, wages are apportioned to California based on the ratio of time spent in California to the total scheduled flight time."

I spend less than 50% of my time in Cali and less than 50% of my scheduled flight time is within Cali. You might have a problem if you're a Skywest EMB guy in Fresno and mostly just flew within Cali. Would be interesting to know.

Thanks for all the replies. Since I first posted I found something similar to what you mentioned

Funny you mention being based in FAT, because in 06 I was based in Fresno on the EMB for about 7 months. Not being very tax law savy I did not file a Cali return. A few years later I got a letter from the state tax commission. I ended up filing a late return that showed I owed them nothing for that year and they left me alone. I'm not sure if the 50% thing applied, though it would have been close. Since I am commuting again I suspected I would run into a similar issue, but I was not sure.

I'm certainly not tax guru, but here's what I found so far. IF a commuting crew member flew more than 50% in a state they were based in, they most likely need to file a tax return there. Like Jtrain mentioned many states may compensate on your home state taxes you paid in other states as a non-resident. Colorado works the same way as Cali. If I had done a bunch of flying inside of Colorado, i.e. lots of Denver to Aspen trips and my total flight time was over 50% in state, I would need to file there as well as my home state. Fortunately for me I was only based there for a few months in 2011 no I did not need to file; and even when this year is over I will most likely not even be close to the 50% in state flight time thing.

My experience this week has shown me that your average non-aviation tax advisor does NOT know this stuff and will tell you that you should file in any case.

I’ll scrounge up some links later if anyone is interested.