If you Workamp in more than one state during the year, tax season can feel confusing. Each state has its own income tax laws, and figuring out where and how to file can be overwhelming.
The good news? With some planning and the right resources, you can make filing state taxes much simpler and avoid unpleasant surprises.
We recently talked with Heather Ryan, an Enrolled Agent and fellow RVer, about taxes for Workampers.
She explained that the biggest factors to consider when you travel and work in multiple states are the following:
- Domicile
- Physically working in a state
- Length of time spent in each state
Understanding Domicile for Workampers
Your domicile is your permanent legal residence, and it determines which state ultimately claims you for tax purposes – even if you work temporary jobs in multiple other states throughout the year.
Domicile is important because it’s where you claim as your resident state. Your domicile should issue your driver’s license, RV and vehicle registration and insurance, and it is where you have ties for tax purposes – it is the state you’ll always owe taxes to, regardless of where you Workamp, which means you may need to file both a return in your home state and in any other state where you’ve earned income. This is why many RVers choose income-tax-free states.
Learn more about Selecting Your RV Domicle here.
Are You Physically Working in a State
Next up, consider if you’ll be physically working in a state or not.
Examples of physically working in a state 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.
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, like Texas, as your domicile.
On the other hand, if your income comes from work you can do remotely – such as freelance writing, virtual customer service, or running an online business – then you’re not considered to be “physically working” in that state. In those cases, your earnings are generally taxed only by your domicile state, not by the state where your RV happens to be parked.
Time Spent in a State
The last factor to consider when determining how to handle your taxes when Workamping in multiple states is the amount of time you 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. This can have a big impact on your tax bill so make sure you pay attention to the length of your stays.
Filing taxes while Workamping in multiple states may sound complicated, but it doesn’t have to be. The key is to understand where you have filing obligations, keep good records, and don’t be afraid to consult a tax professional if you’re unsure. With a little organization, you can spend less time worrying about taxes and more time enjoying the freedom that Workamping provides.
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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