Paying Taxes and Drawing Unemployment as Vandwellers and RVers

It’s April so I’ve just got with done with the dreaded chore of doing my taxes and it occurred to me that I’ve never done a post on how a full-timer files his taxes. Since many of us are only drawing Social Security or a Disability check, it’s not an issue; they don’t have to file anything with anybody. But, if you are working on the road, have a business or are drawing a pension from a previous job or have interest or royalty income you are faced with paying both Federal and State taxes (or at least filing a return). Being on the road can make things more complicated so in this post I’ll cover unique things that apply to full-timers paying taxes and I’ll also cover drawing unemployment since many of our jobs are seasonal and we will be laid off and then be eligible for unemployment.

First, I have to throw in a disclaimer that I am no expert in any way on taxes and unemployment, especially Federal taxes (I’ll refer to it as the IRS), I offer you zero assistance on them. But I’ve been doing this for awhile so I do have an understanding of who to pay state taxes to and where and how to draw unemployment, so I’ll offer advice on that. It’s all true based on my experience and to the best of knowledge but it’s worth exactly what you’re paying for it—NOTHING! Maybe I’ve been doing it wrong all these years, who knows! So you’re responsible to do due diligence and verify everything I say here.

Before we start let me clarify income; there are two kinds of income and their type determines where you file it:

  1. The first is employment income where you have a job, get paid wages and get a W2 at the end of the year. Any income from wages must be reported (file a tax return) to both the IRS and the state you earned it in.
  2. The other is basically everything else and for those you usually get a 1099 at the end of the year. Non-wage income is only reported to the IRS and to your state of Residence (if they have an income tax).

Federal Taxes:

The fact that you live mobile in a van or RV changes very little about Federal Taxes, you still have to report it just like you did when you lived in a house.  But there are two common questions you may have: 

1) “What do I use for an address?” Every person in America needs a mailing address and a residential address for myriads of purposes but especially for filing your taxes. The best is to have a trusted family member or friend who will be your address and receive your mail and forward it for you. If you don’t have that, then you need to get a Mail Forwarder who will receive your mail and forward it to you as you travel. I’ve been using my Mail Forwarding address in Nevada when I file with the IRS for the last seven years without any problem.

2) “Can I deduct the interest on my RV  from my taxes?” I’m not qualified to answer that but if you go to IRS Publication 936 they do answer it for you: Here is a quote from the Publication:

“Qualified Home

For you to take a home mortgage interest deduction, your debt must be secured by a qualified home. This means your main home or your second home. A home includes a house, condominium, cooperative, mobile home, house trailer, boat, or similar property that has sleeping, cooking, and toilet facilities.”

It’s pretty plain that an RV can be claimed as a home and interest paid on it deducted. From my reading the rules are strict and the facilities must be built in  so I doubt most vandwellers could qualify. Again, seek advice from a tax professional in subtle issues of the law like this one.

State Taxes:

This is where it gets complicated for many of us. I have friends who work in two or three different states and live in a fourth state; to whom do they file a return and pay taxes? Here it is in a nutshell:

  • First, because we are travelers we get to choose the state we call our “Residence” I highly recommend choosing a state with no income taxes; that will make your life much easier and can save you some money. The most common choices are: Florida, Texas, South Dakota, Nevada and Tennessee. If you chose a state with out income tax, that makes April 15th much simpler!
  • When you have a job, get paid wages and get a W2 at the end of the year, you only pay income taxes to the state you earned the wages in and not to your state of Residence or any other state. When you get a W2, you only have to report it to the IRS and the state where you earned it.
  • For all other kinds of income such as a business, pensions, royalty’s, interest or whatever else, you must report that to both the IRS and your state of Residence if they have an income tax. Which is why I recommend a state where they don’t have an income tax

Let’s take an example of a full-timer friend who lives in her van or RV and became a South Dakota (SD) resident. For income she has:

  1. A small pension from an old employer and she gets $7,300 a year (she gets a 1099 at the end of the year).
  2. Worked in the summer as a campground host in California (CA) and made $4,500 dollars.
  3. Then she worked for Amazon in Kansas (KS) and made $7,700.
  4. After being laid off from Amazon, she spends her winter drawing unemployment in Arizona (AZ).

As a SD resident she doesn’t have to pay any taxes so she doesn’t file anything with them for her pension and wages are only reported to the state you earn them in. So she does have to file tax forms to both CA (reporting the $4500 she made there) and file a return to KS for the $7700 she made in their state. If she lived in a state with an income tax like AZ she would have to file a tax return for her pension to them. In total she has to file a federal and two state returns—three if she lived in a state with an income tax.

All that starts to get pretty complicated even though her total income for the year was only $19,500. I highly recommend buying TurboTax software. It makes filing your taxes easy and will automatically transfer your Federal information to the state returns and makes getting it all done reasonably painless. Get it from Amazon here: TurboTax Deluxe 2014 Fed & State Tax Software

However, she can also file for unemployment for the winter as long as she was laid off from both jobs, which she was, let’s look at drawing unemployment:


I worked as a campground host for four years and each winter I drew unemployment so I know it can be done and I encourage each of you to do it. Believe me, I’m well aware of what a tangled bureaucratic mess it can be.  Trying to get it in CA as a non-resident who had income from others states was a nightmare! But I persevered and finally got it and then from then on it was simple—and profitable! I made $700 a month in unemployment from CA. Here are the facts as I know them about unemployment:

  • Unemployment is a Federal program administered by the states. They communicate well with each other and if you worked in multiple states you will only file once and the states will work together behind the scenes to arrive at the amount you’ll be paid.
  • If you are laid off from a job (which most of us will be as campground hosts and working for Amazon) you’re eligible to apply for unemployment.
  • If you have other income such as a pension, that isn’t factored into your eligibility or amount paid. File even if you have a pension.
  • Your state of Residence doesn’t matter, nor does the state where you are at when you file. I’m a Nevada resident but I’ve worked and filed in both Colorado and in California and it wasn’t an issue. Nor does it matter where you are when you file. I filed for Colorado unemployment from Florida where I was visiting my mom and I’ve filed for California unemployment when I was in Nevada one year and in Arizona another.
  • There are hoops you have to jump to keep your unemployment coming in and they vary by the state. In Florida all I had to do was register online with their unemployment office and fill in an online Colorado form verifying I was not working and I was looking for work. In Nevada I had to take a half day class in how to find a job. It was a surprisingly good class and I left certain that if I wanted a job they could get me one. Of course I didn’t want a job. You just go through the motions and fill out the forms, no big deal.

Here is a quote from a page I found that did a great job of describing how to get unemployment if you work in multiple states

Multi-State Unemployment: Workers move from state to state all the time. With the rise of telecommuting work, it’s also more common for workers to live in one state but work in another. Multi-state unemployment is a situation where you worked in more than one state during your base period, which is the first four of the last five full calendar quarters before you filed for benefits.

Agent State: In a multi-state unemployment claim, the state you currently live in is the agent state. The agent state is the one that manages your unemployment claim. You apply to that state for benefits, explaining that your 15 to 18 months of previous wages were in other states. Once the agent state hears back from those states, verifying your eligibility and compensation amounts, it distributes your payments. It also handles the weekly claims certifications and verifies your job search requirements.

So there you have the basics of paying taxes and drawing unemployment on the road. Let me say again that I am just a layman and not an expert in any way, all of this is just my understanding of how it works. Do your own research and get TurboTax to file your return.


I've been a full-time VanDweller for 12 years and I love it. I hope to never live in a house again!

46 comments on “Paying Taxes and Drawing Unemployment as Vandwellers and RVers
  1. Greg says:

    Hey All, my comment isn’t about taxes but it may be relevant. If you are or plan to use South Dakota for residency I read somewhere online that health care can be an issue for full timers depending on your circumstances. Look into it carefully before selecting SD as residency.

    • Bob Bob says:

      You’re right Greg, health care is a problem for some SD residents. If you need to get an insurance company off the exchange there are no companies on the
      SD exchange that offer a nationwide policy. But since we are never in SD, we MUST have a nationwide plan, or we can never use it. For that reason some people are switching to Texas ad Florida because they both have companies on the exchange that offer nationwide policies.

  2. Gennifer says:

    Thanks so much for this post, Bob! My seasonal job is ending soon and I had been trying to figure out the whole multi-state unemployment mess without any luck. You’ve made it much easier now!

  3. joe says:

    I have not filed in years I don’t own any thing of value I put a higher # of dependents on the w2 and just collect my pay have not had any concern with the evil tax man also I don’t.t make much in a year anyway low income is my life for a long time

  4. Kevin says:

    Just FYI. If you are getting unemployment insurance claim (you have a pink slip that you are laid off – no work) in some states (mine was Connecticut), they are serious and aggressive about verification that you have been trying to get new work. I had to turn in full contact information about the companies I applied for, and at the time it was at least ten companies a week you had to attempt employment at. The claims department will call those companies and ask if you have an application with them.

    Now that everything is online its easier to provide that kind of proof, and its easier to remotely apply for work when you are not physically there in the state.

    Look at the drastic difference some states give you for benefits.

    • Bob Bob says:

      You’re right Kevin, you have to jump through each states hoops and they are all different. I knew I couldn’t cover the details of all 50 states, so I’m just leaving that up to you to find out when you apply.

      Connecticut is pretty drastic! Most states don’t have the money to spend on that kind of manpower to do the verification. My guess is they spend more money on wages making those phone calls than they save.

  5. Lyn says:

    Be sure and double check any state you have pension or interest baring savings account. I now reside in SD, where there is no state taxes (as Bob said). I have a small savings account in a North Carolina Credit Union and do have a small pension from there. While I don’t have to pay taxes in NC as the amounts are too small, I do have to send in a tax return to them – forever even though I now reside in SD!

    • Bob Bob says:

      Thanks for that info Lyn, since it didn’t apply to me it’s something I know nothing about. That’s where the disclaimers come in!

  6. Lynn says:

    Wow, no wonder your government is such a mess and owes gazillions of dollars. That is the stupidest tax system I have ever seen.

    Personally, I find it a little hypocritical to live off the grid and complain about the man yet trying to get more money out of the man.

    PS I also don’t think you should be putting someone’s personal tax information on a website for the world to see, it is pretty obvious to all that read your blog who you are referring to.


    • Bob Bob says:

      Lyn, the US is made of 50 different states and each state has it’s own independence and taxing authority, I don’t think that’s terribly unusual and it seems like a reasonable thing to me. When we rebelled from England the 13 original colonies were extremely independent and afraid of turning power from one despot and creating a new one who could terrorize them. To get them to join the union, we created a series of checks and balances so the federal government couldn’t become a dictatorship. It’s worked pretty well so far but it does create a patchwork of different laws and taxes. Freedom is messy sometimes.

      Where did you see me suggesting we get more money from the man, I missed that. If you are talking about unemployment I paid taxes into the unemployment system for 35 years and I’m just trying to get my money back from them. In Alaska it’s Called SUI State Unemployment Insurance, mine was about $3 a week. I’m not asking for a gift, I’m putting in a claim on insurance I paid into for 35 years. Is that hypocrtical?

      I’m surprised it’s obvious because it’s a composite person. I did’t know one person who had everything I needed as an example so I put two together. And the numbers are made up because nobody except my girlfriend Judy tells me there numbers, and none of that applies to Judy, she was never a campground host, Worked for Amazon in Nevada where she doesn’t have to pay taxes and she doesn’t have a private pension.

      If there is someone out there who matches the mythical person I created, I apologize for accidentally giving out your info.

    • Kevin says:

      Lynn – was at first thinking like you, that this is kind of a gray area for ethics. But then I thought that it is an insurance, not a free benefit; and insurance companies gamble you are not going to need it against the costs of actually paying (all subsidized more by the state government). Plus businesses and government will take advantage of unemployment insurance to hire seasonal persons knowing they will lay them off, and it will take 20 plus weeks to get another job (who would do seasonal, if you did not have time to line up back-to-back jobs?). Notice its only half a year of benefits – and that you need to NOT BE in this cycle if you live paycheck to paycheck. Its all a system of balances to a point, for some slight income security.

      Doing the math for some states, the benefit is less than minimum wage ($360 is minimum wage at $9 an hour). That’s not much to live on; and real close to the poverty limit for household of a single person ($11,670 is poverty which is $224 a week).

      Yes know many are adept at living like this, at this income level; but seems so borderline.

      • Allie says:

        I, too, wonder about the unemployment thing. Given what I know about unemployment (at least in CO) you have to actively be looking for a job to qualify and receive it (proof is required on a weekly basis). I’m not certain how intentionally seasonally-employed individuals qualify in that light? However, I’ve never read the rules/regs so I am certainly no expert. I’m all for finding ways to get off the traditional “treadmill” and I’ve definitely given consideration to full-timing one of these days – potentially including seasonal work. But I never considered unemployment as a revenue stream in those plans, so I’m essentially thinking out loud here as I contemplate my thoughts on the matter.

        And if it’s to collect on what was paid in…35 yrs x 52 wks x $3 = $5460 which would be recouped in less than 8 months at the $700/month CA rate mentioned. Assuming 10% annual interest with 2% annual inflation impacts on that same amount, it would equate to about $22K which would amount to over 31 months at $700/month.

        • Bob Bob says:

          Alfie, you and I must have different ideas of insurance. If I take out health insurance policy and pay in $2000 for a year and then get cancer that costs a million dollars, I still expect them to pay all my bills. Maybe you would do the math and decide to not file those claims and just pay it yourself, that would be up to you. If I change car insurance companies, pay them $800 in a year, then have an accident that costs them $200,000, I will expect them to pay it. They expect me to pay every month, I expect them to pay. Again, if your ethics don’t allow that, it’s a decision you will have to make for yourself and we wil have to agree to disagree.

          I’ve collected unemployment insurance in CO so all I can tell you is my direct experience. Every two weeks you have to go online and and fill out a form and swear that you are not working and you are looking for work. I did that and I lied because i am a liar.

          I would certainly understand if you don’t want to read the blog of liar.

          • Alfie says:

            Sorry, Bob. Didn’t mean to offend. Was just trying to understand better. I’m not usually a commenter and get the impression this type of discussion isn’t welcome, so I’ll be on my way. A couple of last thoughts:

            Your additional comment about companies that directed you to draw unemployment is enlightening. My thoughts are coming as a small business owner who is married to another small business owner who directly sees/feels the impact of people drawing unemployment (i.e. yes, the company you worked for pays). When business is tough enough for layoffs, that impact is not insignificant. Neither of the businesses I reference are seasonal, so I have no knowledge of that; I’m just providing my context.

            On second thought, in the interest of not invoking more irritation and replying in a “tit for tat” manner, I’ll stop there.

          • Bob Bob says:

            Alfie, whether we like it or not we are headed down the road of a welfare state and unemployment is part of it. In my case since my employer invited me to collect and I have paid in more in SUI than I will ever take out, it was a no-brainer–it would have been foolish for me not to collect.

            Another big issue is Obama-care. The Federal government is now paying $300 a month for me to have insurance while I pay in another $100. It’s just a gift, they don’t owe it to me, and I never paid taxes toward it. Some working stiff and his employer is paying for it.

            But I would be foolish not to take it, especially since they will penalize me for not taking it, I really have no choice.

            If the government insists on giving us money, I don’t think it’s wrong to take it.

          • Sean O'Leary says:

            Maybe because I’m from NY, but the level of sanctimony and hypocrisy written by some of your readers is frightening! Anyone who has even the slightest reservation of sticking it back (what little we can) to a government who has not even a ounce of capitalistic shame when trying to break it off in our collective a**es every chance it gets (read VETERANS!) is truly a socially inept and indoctrinated/drinking the Kool Aid misfit! Thank you Bob for such nice and courteous replies. Mine, as you can see, would be MUCH more ‘undressed!’

          • Bob Bob says:

            Sean, thanks for your thoughts!

        • Calvin R says:

          Wouldn’t it be simpler to accept that society as represented by State governments has decided that you are entitled to payments in this situation? We can argue morality endlessly, but I have given up much of it in favor of simplicity.

      • Bob Bob says:

        One thing I haven’t made clear is that the companies you worked for pay or all of the unemployent. I don’t know the details, but I do know that’s basically how it works. My guess is it is split in some way between the employer and state.

        I worked and drew unemployment against a company called California Land Managemnet where I was a campground host for three years. Every spring we had an orientation week where they covered everything having to do with working there.

        The told us right there that they wanted is to draw unemployment every fall. They considered it part of our compensation. They knew if they paid and treated us well, and then we had unemployment coming in over the winter, we were much more likely to come back. And it worked, we had a very high return rate and low turn-over rate. In the long run it saved them money in training and lost productivity to poor employees. .

        I went back three yeas and a buddy I got a job is on his 6th year and I think he may work there the rest of his life!

    • alfred says:

      Hi, Lynn!

      First, the reasons for US government debt are fairly complex, but most of the money our federal government spends (uh, 76% this year) goes to the retired, health care for the old and poor, and the military. Unemployment insurance (funded largely through premiums paid by both employer and employee) doesn’t reach the radar.

      Bob provided a great introduction to our federal system, but what he didn’t mention is that in many parts of the US there is an enormous dislike/distrust of the federal government (which splits largely along urban/rural lines).

      This antipathy is of long standing and is part of our national character. Seen most clearly in the old aphorism, “There are three great lies in American life: 1) I am from the government and I am here to help” (I’ll spare you the last two), and maybe (in exaggeration) in those old western movies.

      The other point I’d make is, the US is an enormously diverse country, ethnically, religiously, racially, etc., and although we all try and get along (well, most of the time), absent a war or natural disaster, there isn’t a lot of the social cohesion typical of more homogeneous societies.

      These two traits combine to foster a sense a ‘rugged individualism’ which is still alive and well in the American West.

  7. Bob, this is an exceedingly good post! Thank you so much!

    You answered so many questions…plus I never figured on the Unemployment factor!

    Again, thank you very much!

    • Bob Bob says:

      You’re welcome Cindy. Unemployment is something many people leave out since most of us have never drawn it before. But I figure I paid into Alaska’s unemployment for over 35 years and never took any out, so I felt like I was just taking back money I had paid in and was owed me.

  8. This year’s taxes were my easiest ever. All zeros.
    Al Christensen recently posted…PatienceMy Profile

  9. molonewolf says:

    Thanks BOB good info. Stay safe out there my friend

  10. Linda Sand says:

    I recently learned that if you want to apply for health insurance subsidy you MUST file a tax return even if you don’t make enough to pay. No tax return = no subsidy.

  11. white trash says:

    Earth: The only planet in the universe you have to pay money to live on.
    white trash recently posted…Paying Taxes and Drawing Unemployment as Vandwellers and RVersMy Profile

  12. T says:

    Thank you, Bob. I only had to file for unemployment once in my life (California, 2012) and it was not my favorite experience. If I can’t find a winter job, this post will definitely be a valuable resource for me!
    T recently posted…Selling Little Pieces of YourselfMy Profile

  13. Curtis M. says:

    Great post Bob! Thank you for this info. Will be filing this away in my growing cheap rv living folder for future use.

  14. jeff johnston says:

    AS the group The Who put in their song going mobile: watch the police and the taxman miss me.

  15. jeff johnston says:

    No wonder we once rebelled against England. They have to pay for the Queen.

  16. AsphaltGypsy says:

    I have found this to be exactly what I was looking for to get some idea of how taxes and unemployment work in this lifestyle. Thank you again Bob for the information. Your site is truly helpful, insightful, and full of amazing people/stories/useful information!

  17. Tim says:

    I plan on setting up domicile in South Dakota when I begin full-timing next month. Does anyone know if capital gains (profit taken from investments that are sold) are taxed in SD? I’m uncertain if capital gains earnings are legally treated as income or not?

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