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When State Legislators Can Deduct Living Expenses

Generally, a taxpayer’s “business home” is the principal place of activity for the business. However, state legislators who attend legislative sessions away from the area of their residence may elect to designate their personal residence their “business home” when deducting travel expenses.

To make this election, a legislator should attach a statement to their income tax return or amended return for the taxable year for which the election is effective. The information required on this statement is stated in the proposed regulations under IRC Section 162(h).

Conditions

  • Only legislators whose place of residence is more than 50 miles from the state capitol may make this election.
  • The legislator may not deduct expenses for which they have been reimbursed.
  • “Living expenses” does not include expenses for travel fares, local transportation or telephone calls (see Publication 463 (PDF) for a list of acceptable expenses).
  • Unless the legislature is not in session for a period greater than four consecutive days, it is considered “in session.”
  • A “legislative day” includes any day the legislature is in session and members are expected to attend, regardless of whether the electing legislator actually attends.
  • A “legislative day” also includes any day the legislature is not in session but the physical presence of the electing legislator is formally recorded at a meeting of a legislative committee.

To calculate

Multiply the number of legislative days that apply during the taxable year by the greater of:

  • The Federal employee's per diem; or
  • The legislator's state per diem, as long as it doesn’t exceed 110 percent of the Federal employee per diem.

References

Treasury Decision 9481

Publication 463

Section 162(a)(2) of the Internal Revenue Code