Below are Frequently Asked Questions which former Visiting Scientists and Intergovernmental Personnel Act (IPA) appointees have posed to IRS staff during presentations at NSF. NSF cannot provide advice or assistance on personal income tax issues. Please contact the IRS or your tax advisor if you have any further questions, especially since tax laws and regulations often change annually.
Federal Income Tax
If I plan to be at NSF for less than a year, what expenses are deductible and do I need to save receipts?
Answer: NSF has a non-accountable plan for reimbursing temporary employees who elect to receive per diem as opposed to a household move. This means that you receive per diem from NSF and you do not account to NSF for how it is spent. However, you should keep accurate records of actual expenses in the event of an IRS audit. Per diem received in excess of actual expenses must be claimed as income. Most of your expenses are deductible, that is, they can be claimed to offset the per diem; these include transportation to and from work, lodging, laundry and business phone calls, meals (50% of DC metro area rate), tips on any of these items, automobile actual expenses such as depreciation, maintenance, repairs, gas, oil, or the prevailing mileage rate.
If I am at NSF for over 1 year, are these expenses above still deductible?
Answer: If you agree up front to be in the employ of the Foundation for more than 1 year, none of these expenses is deductible, and you should claim the per diem you receive as income on your income tax return.
Would my tax situation be affected if I went home for a month at the end of one year and then returned for another year?
Answer: The question here is one of intent; when did you change your intent to be employed at NSF for more than 1 year? If you went home fully intending to remain there and then "changed your mind" and returned to NSF, yes. If you intended all along to work at NSF for longer than one year, then no. Please consult with your tax advisor.
Is it best to get a lump sum of all of my per diem up front or should I request to get it in increments?
Answer: You probably do not want to receive per diem in excess of your eligibility for the calendar year, because per diem received in excess of actual expenses must be claimed as income, as explained in #1. For example, if you arrive in September, you will probably only want per diem for four months (September-December).
If I am an IPA and get paid by my university, isn't my tax home where my university (house, family) is?
Answer: If you are here for less than 1 year, you are on a temporary assignment and your tax home remains your home state. If you are here more than 1 year, Virginia (where you work) becomes your tax home. For more information see: http://www.tax.virginia.gov/.
State Income Tax
Do I have to pay VA, MD or DC taxes if I maintain a residence in another state?
Answer: Virginia law imposes individual income tax filing requirements on virtually all VA residents, as well as nonresidents who receive income from VA sources, however residents of DC & MD are exempt from this requirement if the only VA source of income received was from salaries or wages. Income taxes paid to other states are addressed through tax credits. Non-residents are individuals who are neither domiciliary nor actual residents of VA, but who receive income from VA during the tax year. They report their income in the same manner as residents, using VA Form 763. For more information see the website at: http://www.tax.virginia.gov/.
Motor Vehicle Tax and Registration
Do I have to register my car here in VA, MD or DC?
Answer: You need to register your car in the state in which you live (MD, DC, VA) within 30 days of moving here. See more information for Virginia, Maryland or DC