Scheduled Chat - Workamping/Volunteering - RV-Dreams Community Forum

Howard · Host

Scheduled Chat - Workamping/Volunteering

wmalefyt · RV-Dreams Family Member

Great, we'll be there Howard.

petitetot · RV-Dreams Family Member

Oops sorry we'll be in Cuba LOL. Next time I hope.

Howard · Host

Here is the link to the transcript for this chat:

Workamping/Volunteering Scheduled Chat Transcript from 12/13/07

jdensie · RV-Dreams Family Member

Sorry, that we missed this chat. Two events happened that kept us away.

1. The resort that we are working at held their annual employee Christmas party that night and beside eating we danced and bend the elbow the night away.

2. Of all days the WiFi at the resort was down for the day and we could not get on line till Thursday morning.

We did read the transcript of the chat and want to thank you for putting it in the forum. I had owned a CG for 12 years and at the present time we are now workampers. I am sure we could of added some insite to this chat as I was on both sides.

To all a "MERRY CHRISTMAS"

jcw · RV-Dreams Family Member

I have a question that didn't get asked in the chat. If I were to work in say 4 different states over the course of a year, none of them my state of residence, but all of them having a state income tax, would those states attempt to stake a claim on my unearned (investments) income that I earned during my stay in their state?

Darrell and Judy · RV-Dreams Family Member

JC,

You ask a great question. I have been told that there are some states that will tax a portion of your investment income but we have not encountered any. What I do is go to the internet and search for the state income tax forms and information booklet to see how the income tax is calculated. The states that we have w*rked in have only taxed the portion that is earned in their state. But you do have to be careful when they start using percentages to determine if they are taxing your entire income or only the portion earned in their state.

bjoyce · RV-Dreams Family Member

California is notorious for taxing you for the time you spent in the state. They tax professional athletes using the length of the season, not the year so if they play six games in a 50 game year they are charged 6/50ths of their income. A friend moved from California in May to take a job since she was unemployed and California charged her for 5/12ths of her income, none of which was made in California.

Howard · Host

Full disclosure: I am no longer an attorney, and never was a tax attorney. I think I have a handle on this, but I'm certainly no substitute for your own professional. smile

I think there are a couple of things here, and there is a very fine distinction. Of course, we are only talking about states that have an income tax or an investment/dividends tax.

First, your investment income should ONLY be taxed in the state of your residence .... AS LONG AS you were a resident of that state for the full year.

So, if I'm a resident of Kentucky all year and workamp in four different states, I file a RESIDENT tax return in Kentucky and report ALL income (investment or earned) from everywhere (all states). I file a NON-RESIDENT tax return in the workamping states and pay taxes on the income earned in each of those states. I then get a credit in Kentucky for the taxes paid in the workamping states.

In Bill's first example of the professional athlete, the athlete's income earned in California is taxed in California, and the athlete gets a credit on that tax paid in his/her residence state. But California wouldn't tax a pro-rated amount of a NON-RESIDENT'S investment income or other income earned outside of California.

In Bill's second example, we have a different scenario. The friend was a part-year RESIDENT of two states. Therefore, the rules are different. ALL income is reported on PART-YEAR RESIDENT returns in both states. Then there is an apportionment or proration of income between the states based on the states' income tax laws. And those apportionment laws could be very different.

So residency is the key to whether your investment income will be taxed in multiple states. As long as you are a full-year resident in a single state, I know of NO states that will try to tax your investment income if you simply work part of the year in their state as a non-resident.

FULL YEAR RESIDENTS are taxed on all income (earned and investment) from whatever source in the state of residency. But a credit is given for taxes paid on income earned in workamping states.

NON-RESIDENTS (workampers for our purposes here) of a state are taxed in that state on all income earned in that state.

PART-YEAR RESIDENTS pay tax on all income (earned and investment) from whatever source to all the states in which they were residents. There are credits or prorations between the states based on each state's laws so the taxpayer is not subject to full taxation in both states.

So, workamping alone, in a different state of your residency, should not trigger taxation of investment income. But we must be careful and make sure that we don't give the workamping state reason to claim us as a resident by staying too long and creating the appearance of an intent to remain.

Whew! That's another reason why lots of folks forgo the paid workamping jobs in favor of volunteer jobs. biggrin