Seasonal Workers and Deductions: What You Need to Know

24 April 2025

Working a seasonal job can be a fantastic way to earn extra cash, gain experience, or bridge the gap between full-time positions. But when tax season rolls around, figuring out what deductions you’re eligible for can be confusing. If you're a seasonal worker (or you hire them), understanding tax deductions can save you a ton of money—and headaches.

In this guide, we’ll break down what seasonal workers need to know about tax deductions, so you don’t end up paying more than you should.

What is a Seasonal Worker?

A seasonal worker is someone who works temporarily during specific times of the year, usually for industries like retail, tourism, agriculture, and hospitality. Employers typically hire seasonal workers to meet higher demand during peak periods—think retail employees during the holiday shopping season or lifeguards during the summer.

Because they work for short durations, seasonal workers often face unique tax situations, making it crucial to understand how deductions apply.

Do Seasonal Workers Pay Taxes?

Yes, seasonal workers must pay taxes, just like full-time employees. Even if you only work for a few months, the IRS still expects its cut.

Your tax situation depends on how you’re classified:

- Employee: If you're hired as an employee, your employer will likely withhold taxes from your paycheck.
- Independent Contractor: If you’re hired as a freelancer or gig worker, taxes won’t be withheld, meaning you’ll need to set aside money for tax payments.

Even if you don't earn a full-time salary, you may still owe taxes, depending on your total annual income and deductions.

Tax Deductions for Seasonal Workers

1. Work-Related Expenses

If you incur expenses directly related to your job, they may be deductible. This includes:

- Uniforms and Work Clothes – If a job requires specific clothing that you can't wear elsewhere (e.g., a branded uniform or safety gear), the cost might be deductible.
- Tools and Equipment – If your role requires personal tools or gear (like a lifeguard's whistle or a chef’s knives), you might be able to claim that expense.

2. Travel and Commuting Costs

Most commuting expenses aren’t deductible, but if you travel for seasonal work, you may be eligible for deductions:

- Mileage Deduction – If you drive your personal vehicle for work-related travel, you may deduct mileage at the IRS standard rate.
- Lodging and Meals – If your job requires temporary relocation, you might be able to claim accommodation and food costs.

3. Job Search Expenses

If you spend money looking for seasonal work, some of those costs may be deductible, including:

- Printing resumes
- Travel costs for interviews
- Fees for job-placement agencies

4. Education and Training Expenses

If you take courses or certifications directly related to your seasonal job, you may be able to deduct the costs. For example, if you take a course to become a certified ski instructor for a winter job, that expense is potentially deductible.

5. Home Office Deduction (For Gig Workers)

If you work as an independent contractor and use your home as an office, you may qualify for a home office deduction. This includes:

- A portion of rent/mortgage
- Utilities
- Internet costs
- Office supplies

The space must be used exclusively for work to qualify.

Tax Credits for Seasonal Workers

Aside from deductions, you might also be eligible for tax credits, which directly reduce the amount of tax you owe. Some common credits include:

1. Earned Income Tax Credit (EITC)

Even if you only work part of the year, you might qualify for the Earned Income Tax Credit if your income is low enough. This can significantly reduce your tax bill—sometimes even resulting in a refund.

2. Child and Dependent Care Credit

If you pay for childcare while working a seasonal job, you might qualify for the Child and Dependent Care Credit, which helps offset those costs.

Filing Taxes as a Seasonal Worker

Filing taxes as a seasonal worker isn’t too different from regular employees, but there are some things to keep in mind.

1. Keep Track of All Documents

You’ll need to gather all necessary forms:

- W-2 Form: If you’re an employee, your employer will send you a W-2 showing your earnings and tax withholdings.
- 1099-NEC: If you’re an independent contractor, you’ll receive a 1099-NEC instead of a W-2.
- Receipts for Deductions: Keep receipts for any work-related expenses you plan to deduct.

2. Know Your Tax Bracket

Since seasonal workers only work part of the year, they may fall into lower tax brackets, which can impact how much tax they pay.

3. Consider Estimated Tax Payments (For Contractors)

If you work as an independent contractor, you may need to pay estimated taxes throughout the year instead of waiting until tax season. This helps avoid penalties for underpayment.

4. File Early to Avoid Delays

Tax season can be stressful, so it’s best to file early to ensure you don’t run into last-minute issues. Plus, if you're getting a refund, you'll receive it sooner!

Common Mistakes Seasonal Workers Make on Taxes

To avoid overpaying (or underpaying), watch out for these common mistakes:

1. Not Filing Taxes

Some seasonal workers assume that because they didn’t make a lot, they don’t need to file. But failing to file can result in penalties—even if you don’t owe much.

2. Ignoring Tax Withholdings

If you work multiple seasonal jobs, each employer may withhold taxes, but not necessarily at the right rate. You could owe more at tax time, so keeping track of what’s withheld is important.

3. Forgetting to Claim Deductions

Many seasonal workers leave money on the table by not claiming eligible deductions. Even small expenses can add up!

Do Employers Get Tax Breaks for Hiring Seasonal Workers?

Yes! Employers who hire seasonal workers may benefit from certain tax breaks, including:

1. Work Opportunity Tax Credit (WOTC)

If an employer hires seasonal workers from certain target groups (such as veterans or long-term unemployed individuals), they might qualify for the Work Opportunity Tax Credit (WOTC).

2. Payroll Tax Savings

Employers don’t have to provide benefits like health insurance for temporary workers, which can reduce their tax burden.

3. Seasonal Business Expense Deductions

Employers can deduct seasonal payroll costs, training expenses, and other recruitment-related costs.

Final Thoughts

Taxes as a seasonal worker might seem complicated, but they don’t have to be overwhelming. Keeping detailed records, understanding what deductions you qualify for, and knowing how tax credits can benefit you can make tax season much smoother.

Whether you're picking up a holiday retail job or working on a farm for the summer, understanding taxes can help you keep more of your paycheck—and who doesn’t want that?

So, next time tax season rolls around, you’ll be prepared (and maybe even a little excited) to file.