EXPAND YOUR HORIZONS
Make the Right Connections
Everything You Wanted to Know About
Short-Term Domestic Assignments
Today’s Presenters:
• Craig Anderson, C.E. Anderson & Company
• Kevin Shimkus, Deloitte
• Dawn Higgins, Nestle Purina PetCare Product
Technology Center
TEMPORARY DOMESTIC ASSIGNMENTS
Short Term
Assignments
Long Term
Assignments
• Generally – assignments
of less than one year,
then the employee
returns home.
• A less than permanent,
shorter duration
relocation in which the
employee returns back
home upon completion of
the assignment.
SHORT TERM ASSIGNMENTS
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What they are?
When are they used?
How will usage volumes change?
Why doesn’t everyone use them?
FORMAL POLICIES
ASSIGNMENT PURPOSES
PROJECTED USAGE
ASSIGNMENT CHALLENGES
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Domestic Travelers : Setting the Stage
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Short term business travelers
Frequent business travelers
Short term assignment
Long term assignment
Relocation
Tax Considerations
• Federal
– Tax home
– Taxation of travel expenses and per diems
• State & Local
– Withholding
– Different definition of “wages”
– Deferred compensation
– Tax resident
Tax Home
• Rev. Rule 60-189
• Traveler must be “away from home” for
travel expense to be excluded from
income
• Principal place of business
• “Tax turtle”
Amount of Time Away From Home
• Rev. Rule 93-86
• Taxpayer has relocated “tax home” when
they have exceeded 12 months in a
location or when there is an expectation
for them to exceed 12 months in that
location.
Short Term Business Travelers:
State to State
California
Connecticut
No De Minimis
threshold
Very aggressive regarding non-resident wage withholding
and tax remittances
Illinois
De Minimis threshold
14 days
December 2, 2009 CT issued Announcement 2009(9)
requiring employer wage reporting and tax withholding for
non-residents working 14 or more days in CT throughout
the year
New York
No De Minimis
threshold
Has quite ‘favorable’ non-resident guidelines — Especially
if company is not located anywhere in IL
De Minimis threshold
14 days
Uses an informal calendar year de minimis threshold for
state tax withholding for a non-resident working in New
York as reported in its state Field Audit Guidelines issued
July 1, 2004
State Tax Issues
• Different definitions of “wages”
– Health savings accounts
– Domestic partner benefits
• Not all states accept Federal W-4
• Deferred compensation & equity
compensation
Local Tax Issues
• Local income tax withholding
• Local employer taxes
Contact Information
Kevin Shimkus
Deloitte Tax LLP
312-486-3254
kshimkus@deloitte.com
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POLICY BENEFITS FOR
TEMPORARY DOMESTIC
ASSIGNMENTS
DOMESTIC RELOCATION POLICY
RESEARCH
TEMPORARY DOMESTIC ASSIGNMENTS
Trippel Survey & Research, LLC
© January, 2012 (Used with permission)
No part of this work may be reproduced
Copies of the report may be purchased by contacting
Trippel Survey & Research, LLC at 501 922-4000
BENEFIT - En Route Expenses
STA
• 47% with a discretionary
allowance
TDA
• 68% with a discretionary
allowance
– Flat dollar amount
– Percentage of salary
– Flat dollar amount
– Percentage of salary
BENEFIT - Return Trips Home
STA
• 82% Once a month
• Every 6 weeks for singles
and married assignees
without accompanying
family
TDA
• 70% Once a month
• Every 6 weeks but none if
family accompanies the
assignee
BENEFIT Family Accompaniment
STA
• 37% Allow family
accompaniment
TDA
• 71% Allow family
accompaniment
BENEFIT - Monthly Incidentals
STA
• Only 40% offer MIA –
regardless of length of
assignment
TDA
• Same - Only 40% offer
MIA – regardless of
length of assignment
BENEFIT - Temporary Living
STA
• Offered by 81% of
companies for the
duration of the
assignment
TDA
• Offered by 77% of
companies but only for 60
days
BENEFIT - Furnishings
STA
• 92% provide furnished
housing or a furniture
subsidy
TDA
• 59% offer furnished
housing for assignments
over one year
BENEFIT - Household Goods
Shipment
STA
• 47% of companies ship
HHG
TDA
• 81% of companies ship
HHG
BENEFIT - HHG Limitations
STA
• 99% limit the shipment in
some way – either by
dollar or by weight
TDA
• 99% limit the shipment in
some way – either by
dollar or by weight.
Higher limit if family
accompanies the
assignee
BENEFIT - HHG Storage
STA
• 17% Allow at home site
TDA
• 37% allow at home site
BENEFIT - Car Shipment
STA
• 46% permit car shipment
TDA
• 77% permit car shipment
BENEFIT - Car Rental
STA
• 68% allow car rentals
TDA
• 35% allow car rentals
BENEFIT - Pet Benefits
STA
• <15% permit shipment or
give an allowance for
pets
TDA
• Same - <15% permit
shipment or give an
allowance for pets
BENEFIT - Tax Protection
STA
• Assignments treated as a
business expense up to
one year or until duration
is expected to exceed
one year
TDA
• Most companies tax
protect almost all
expenses
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Nestlé Purina PetCare
Our Mission
To bring several employees (40+) to the St.
Louis Headquarters Office to work on our
SAP implementation project.
How to we plan for this?
Nestlé Purina PetCare
What’s our current policy?
Do we have a policy?
Who needs to help me?
Nestlé Purina PetCare
How to Plan:
• Identify plans / practices already in place
• Gather your resources
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Partner with Management (HR, Business, Factory)
Partner with Legal
Partner with Relocation Provider
Partner with Finance / Tax / Audit
Partner with Service Providers - Corporate Housing,
Rental Car Company
Nestlé Purina PetCare
Develop our Policy:
• Expanded on plans / practices in place
• Partnered with key resources
• Communicated the policy and the process
• Face-to-Face meetings
• Email
• Offered project incentives
• HR Manager managed and owned the process
Nestlé Purina PetCare
Policy Benefits Offered:
• En route expenses
• Return trips home every week or month
• Housing accommodations (pet friendly furnished corporate
apartment or extended stay hotel)
• Rental car or mileage reimbursement for personal car
• Per diems
• Miscellaneous expenses allowance (start and end of assignment)
• Tax preparation and tax equalization assistance
• Family accompaniment (special circumstances)
Nestlé Purina PetCare
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Challenges:
Tax compliance and expense tracking
Family and personal issues
Communication of policy changes
From an HR perspective – keeping employees
engaged, morale
Nestlé Purina PetCare
Lessons Learned:
• Over communicate
• Policy updates, changes, etc.
• Involve partners early and often
• Evaluate the policy, program
Thank You for Attending!
Questions?