Displaced flight crewmembers are airline
pilots or flight attendants who have been involuntarily transferred out of
their base or domicile.
The reason the subject of displacement is important for airline pilot
tax or flight attendant tax issues is that pilots and flight attendants
who are transferred away from their
tax home may be able to
take advantage of increased
travel deductions including a bigger
per diem
deduction because it is possible that the pilot or flight attendant might
be considered to be on
temporary duty.
As mentioned in the definition of temporary duty, a
temporary duty assignment is one that is
away from the pilot or flight attendant's tax
home, is expected to last for less than one year, and does in fact
last for less than one year.
It may be advantageous for a pilot or flight attendant to consider the
temporary duty clause in the
tax code before they are
displaced. A hypothetical
situation for a pilot might be as follows:
Continental Airlines has the following three domiciles: CLE (Cleveland
Hopkins), EWR (Newark Liberty), and IAH (Houston Bush). Assume Amanda, a
flight attendant for Continental is based in CLE. Due to base shrinkage,
Amanda is displaced out of CLE and awarded her second choice (IAH). Amanda had planned
to move to IAH eventually, but for personal reasons she won't be able to move
to Houston for at least two years. Because Amanda's second bid choice after CLE was
IAH, Amanda was awarded IAH when she was displaced out of CLE. For the next
two years, before Amanda is able to actually move to Houston, she is forced to
commute to IAH from CLE. Unfortunately, Amanda is probably unable to deduct
the travel expenses associated with commuting to IAH because she plans to move
there and she remains based in IAH the entrie time while living in Cleveland,
Ohio. In other words, IAH becomes Amanda's new tax home immediately after she
is displaced because this situation is not
a temporary duty assignment.
Amanda could bid to EWR before a year goes by after being awarded IAH, then
bid back to IAH before a year passes while based in EWR,
but she needs to be careful to stay within the definition of a temporary
assignment if she wants to write-off her
commuting expenses. The point is that if Amanda is not considered to be on
a temporary
assignment, the costs associated with getting to her displaced base from Cleveland and back are
considered to be commuting expenses to a tax home and are not
deductible.
If Amanda had chosen EWR as her second choice
on her system bids
(even though she eventually planned to move to IAH) she might have been able to
consider herself to be on a temporary assignment in EWR. As long as she only
remained based in EWR
for less than one year, that would have entitled Amanda to more
travel
tax deductions for the expenses she incurred commuting to EWR from CLE.
Why? Because in that situation - and for that time period - EWR would not be her tax home. CLE would.
In other words, Amanda would be have been considered to have been
traveling away from her tax home
(Cleveland, Ohio) as soon
as she left CLE.