Contract and charter crew: which rules apply to you

The form your pay is reported on records how a payer treated the engagement. It does not decide whether the law treats you as an employee or as someone in business for themselves, and that is the part that changes your rules.

The form your pay is reported on records how a payer treated the work. It is not a determination of worker class, and the class is what changes the rules.

What the rules say

Employee, or in business for yourself

The form on which pay is reported records how a payer treated the engagement. It is a fact about the reporting, not a determination of worker class, and an occupational title is not a determination either.

Employee, or in business for yourself — If the law treats you as an employee

For an employee, the deductions that would have been miscellaneous itemized deductions are disallowed. Public Law 119-21 struck the end date from the suspension in section 67 and redesignated it, so the disallowance applies to taxable years beginning after 2017 with no expiry, effective for taxable years beginning after December 31, 2025. Publication 529 states that the only remaining routes for unreimbursed employee expenses are the named statutory categories: Armed Forces reservists, qualified performing artists, fee-basis state or local government officials, employees with impairment-related work expenses, and certain qualified educator expenses. No retrieved authority places flight crew in any of those categories.

Employee, or in business for yourself — If the law treats you as being in business for yourself

For a person carrying on a trade or business rather than performing services as an employee, section 162 allows the ordinary and necessary expenses of carrying on that trade or business, and the disallowance of miscellaneous itemized deductions does not reach those expenses. Whether a particular engagement is a trade or business rather than employment is the classification question itself, which this phase does not decide.

Proving it later

Travel, meal and lodging expenses are subject to the substantiation requirement in section 274(d) and the regulations under it. Records that establish where the work was performed, which periods were spent away from the tax home, and what an employer paid or reimbursed, are the records those provisions turn on. No specific record format is stated by the retrieved authority.

Still being read

These are the questions we have not finished reading the authority for. They stay listed here until we have, and until then we do not state an answer.

Where this comes from

Every statement above comes from one of these. Each link goes to the official text, with the body that issued it and the date we read it.

What seat do you work in?

What are you trying to figure out?