Key Takeaways
- Duplicate expenses mean paying for housing at BOTH your tax home AND temporary work location
- This is one of three IRS factors for establishing a valid tax home
- Meeting this rule allows housing and meal stipends to remain tax-free
- Proper documentation is essential to defend your tax position if audited
What is the Duplicate Expenses Rule?
The duplicate expenses rule is one of three factors the IRS uses to determine if you have a valid tax home. It requires that you maintain living expenses at your permanent residence while simultaneously incurring expenses at your temporary work location.
Why Duplicate Expenses Matter
The duplicate expenses rule is critical because it:
- Validates your tax home: Proves you haven't abandoned your permanent residence
- Keeps stipends tax-free: Housing, meals, and travel allowances remain non-taxable
- Protects against audits: Provides clear documentation of your tax home status
- Distinguishes you from "itinerants": Workers without tax homes who must pay tax on all compensation
What Qualifies as Duplicate Expenses?
At Your Tax Home (Florida)
- Rent or mortgage payments
- Property taxes (if owned)
- Utilities (electric, water, internet)
- Home insurance
- HOA fees
- Maintenance and upkeep costs
At Your Temporary Work Location
- Furnished apartment rental
- Extended stay hotel
- Company-provided housing (even if "free"—it has a value)
- Utilities at temporary location
How to Document Duplicate Expenses
If audited, you'll need to prove your duplicate expenses. Keep these records:
Florida Tax Home Records
- Lease or mortgage statements: Monthly proof of ongoing payments
- Utility bills: Even if minimal, shows active residence
- Bank statements: Showing automatic payments to Florida address
- Your Tax Base invoices: Monthly subscription for Florida address services
- Insurance documents: Renters or homeowners insurance at Florida address
Temporary Location Records
- Assignment contracts: Showing temporary nature of work
- Lease agreements: Short-term rentals at assignment locations
- Agency housing documentation: If housing is provided
- Receipts and statements: For any housing-related expenses
Common Questions
How much do I need to spend at my tax home?
There's no minimum amount, but expenses should be reasonable and consistent. A residential address with mail services, combined with occasional returns and other ties, typically satisfies the requirement.
What if my employer provides free housing?
Even if housing at your work location is free, you're still meeting the duplicate expense requirement if you maintain your Florida residence. The "expense" at the temporary location is the fair market value of the housing provided.
Can I use a family member's home as my tax home?
Only if you genuinely pay fair market rent. Living rent-free at a family member's home without making payments doesn't satisfy the duplicate expenses requirement.
How Duplicate Expenses Work with Other Factors
Remember, the IRS uses three factors to determine if you have a tax home. You need to meet at least two:
| Factor | Requirement | Your Status |
|---|---|---|
| Factor 1 | Work in your tax home area | Optional (PRN shifts help but not required) |
| Factor 2 | Duplicate living expenses | Met by maintaining Florida residence + assignment housing |
| Factor 3 | Haven't abandoned your home | Met by driver's license, voter registration, returning between assignments |