Working in D.C

[mitchw]

I live and work in Michigan , the company I work for is looking for volunteers to go work in D.C for the next seven months. There’s a lot of pros to this but I have a lot of questions and they don’t have the answers to them.

I make 25 an hour. They’re giving us 10 an hour over scale, we’re working 7 days 12 hrs for the duration. We get per diem which is tax free not sure on the amount, they pay for the hotel ( we can still sign up for the point system) we also get breakfast, and dinner through the hotel. Plus a company truck and gas card. They’re also flying us back and forth so again I can log air miles.

While I’m working in D.C am I gonna have to pay taxes there and in Michigan? Is the tax rate there much higher then Michigan?

The whole point in going out there is to profit a lot more then I am currently. But if I’m gonna be taxed out to where I break about even I don’t think it would be worth it. Any help is appreciated.

 

[b1inchrist]

@mitchw No answer, but that is a good question...is seems like you neither "live" nor "work" in DC, you live in Michigan for a company (in Michigan?) and are on temporary assignment in a certain location....no?

Hope somebody has some experience to share.

 

[mitchw]

@b1inchrist Yeah I love and work in Michigan. It’s a nationwide company and they’re trying to establish a foot hold in D.C. so they’re sending a bunch of crews from all over down there to work.

 

[b1inchrist]

PS..i did read that you must "be domiciled" for 183 days to be declared a resident.

 

[gen00]

@b1inchrist "Domicile" can be a tricky tax question. It might be worth checking with a CPA or tax attorney just to be sure.

That said, this sounds like a grueling job. 7 days a week, 12 hours a day, for 7 months? That's 84 hours a week (more than two full time jobs), or 2,520 hours total (roughly 25% more than a full year at full time, compressed into 7 months).

I didn't quite understand if the pay would be $10 over the $25/hour rate, or if the $25 includes the $10 premium already, but best case it's $88k for 7 months with a lot of expenses covered. Definitely nice, but not necessarily life changing.

I assume from the insane hours that they wouldn't be paying overtime?

 

[mitchw]

@gen00 Over time after 8 hrs per union contract. And yeah it’s 35 an hour total. And no it’s not life changing but it’s gets me ahead.

 

[gen00]

@mitchw That does change the math quite a bit. With overtime, and 35 per hour, that's over 100k, and with all those expenses covered you might be able to save a lot of it (if you go for it, maybe look into renting out or subletting your current place). Still sounds rough, but well compensated at least.

Do you mind if I ask what line of work you're in?

 

[mitchw]

@gen00 I have a wife and three kids they’re staying here so I can’t rent the house out would be nice though. And no I don’t mind at all I’m a CDL A laborer on a pipeline crew. It’s a pretty fun job once you get used to the physical aspect.

 

[gen00]

@mitchw I just remembered something from a few years back when I worked out of state. If I recall correctly, you're only ever "domiciled" in one state at a time, so if your work would be taxable in DC (which I'm not sure it would be) I THINK you should be able to exclude that portion of your income from Michigan taxes. Your taxes would definitely be complicated for that year, though, as you'd probably have to file a partial non-resident tax return.

I did this when I worked in Alaska and my ex-wife was working in California. Since Alaska has no income tax, we were able to get my income taxed only at the federal level.

I really don't know the details of how it would work for DC and Michigan, though. If your HR department doesn't have any more info, I'd check with a CPA or tax lawyer.

 

[mitchw]

@gen00 Thanks I’ll look into that.

 

[mitchw]

@gen00 Update we filled out a tax exempt form so I only pay taxes in Michigan

 

[b1inchrist]

@mitchw If they are sending a crew, could your HR people help research some of these answers?