Long Term Assignment

What is LTA?

If you work, or are expected to work, away from your tax home or regular place of work in a single location for more than 12 months, then you are considered to be on an LTA. Assignments are considered LTA from the date that you expect to be in that location for more than 12 months.

Why Is Focusing on LTA So Important?

The Internal Revenue Code considers any out-of-town assignment greater than 12 months to be an LTA and subject to different tax rules. All travel expenses reimbursed to an employee on a LTA become taxable as compensation to the employee. Many companies reimburse employees, through an income "gross up," for the additional taxes, but projects are charged (subject to contract terms) with the costs associated with that reimbursement. This "gross up" can add about 70% of the related travel and living costs as an additional cost to the project.