Qualifying for Travel Pay: The Tax Home Requirement

To qualify for tax free stipends, you must meet at least 2 of these 3 criteria:

#1: Duplicate Expenses

• Pay for housing at BOTH your permanent home AND your assignment location.
• Example: Rent a room at your parents' house ($500/month) + rent an apartment for your 13-week contract ($2,000/month). You're clearly duplicating expenses.

#2: Return Home 30+ Days/Year

• Visit your tax home at least 30 days annually. These don't have to be consecutive—visiting over holidays + a few weeks between contracts works.

#3: Conduct Business in Tax Home Area

• Work a PRN job there, or maintain financial/professional ties (bank accounts, professional licenses, voter registration at that address).

Reality: Most new grad travelers qualify by meeting Criteria 1 + 2. You rent at your parents' house and visit for holidays, birthdays, time off between contracts, etc. 

Option 1: Room at Parents' House (Cheapest)

• Pay parents market-rate rent ($400-800/month)
• Sign a lease agreement (so it's documented)
• Use as your official address

Option 2: Lease an Apartment (solo or with friends/family)

• Sign a year-long lease in your tax home city
• Return between contracts, pick up PRN shifts for paper trail

Option 3: House Hacking

• Buy a duplex/triplex; live in one unit
• Rent others; tenants cover your mortgage
• You build equity while traveling and maintain a tax home

Not everyone is laser focused on maximizing personal finance or seeing the world. Some folks would rather stay in town with a role that provides flexibility, autonomy and a pay boost to get through a career transition or a certain phase of life.

You do not need to leave your place of permanent residence to be an agency contractor. 

Now, if you are not duplicating your living expenses and working outside of a "commutable distance" of your permanent address, than you forfeit the ability to receive stipends. 

Local contract wages are typically still lucrative and worth considering. Here are the pro's and con's to help you make the right decision.

The benefits:

• You can do this for an indefinite period of time (as long as the need is there clinically) 
• You do not need to follow any specific IRS guidelines to prepare for tax season
• You can still make more than staff PTs in most cases 
• You still have access to benefits, and CEUs through your agency that true travelers have. 
• All time off requests are built into the contract at the start
• You choose when you want to work

The drawbacks: 

• Market volatility (no needs, no work) 
• Contracts can be cancelled due to full time hire
• You may be asked to float if there is not enough work in one location to hit 40 hrs

To mitigate these risks, ask your recruiter what the job market looks like in your local area year round. 

1. Choose your tax home location (usually where your family lives)

2. Confirm you can meet 2 of the 3 criteria

3. Set up your tax home (easiest: rent a room at parents' house)

4. Speak with a healthcare-specialized CPA to cover your bases:

• They'll verify you qualify
• They'll optimize your tax situation
• Worth every penny (a failed audit is not cheap)

5. Accept your first contract knowing you're set up correctly!