What Is a Tax Home?
Your "tax home" is the single most important concept in travel therapy taxes. The IRS defines it as the general area of your main place of work — not necessarily where your family lives or where you grew up.
For travel therapists, your tax home is typically your permanent residence — the place you maintain as your home base between contracts. This is where you pay rent or a mortgage, keep your driver's license, and maintain financial ties.
Why does this matter? If you have a valid tax home and you travel away from it for work, a portion of your pay package (the housing and meals stipend) can be received tax-free. This is the primary reason travel therapy pay is so much higher than permanent positions.
If you don't maintain a valid tax home, the IRS considers you an "itinerant worker" and ALL of your income becomes fully taxable — including stipends you may have already received tax-free. This can result in owing thousands in back taxes plus penalties.
Tax Home Requirements Checklist
To maintain a valid tax home and qualify for tax-free stipends, you generally need to meet these criteria:
✓ Tax Home Compliance Checklist
Understanding Tax-Free Stipends
Your travel therapy pay package is typically split into two parts: a taxable hourly wage and tax-free stipends for housing and meals/incidentals. The stipend amounts are governed by GSA (General Services Administration) per diem rates, which vary by location and time of year.
How Stipends Are Calculated
The GSA publishes daily maximum rates for each city/zip code. For example, lodging in New York City might max out at $315/night in fall, while a rural area in Iowa might be $98/night. Your agency structures your pay to keep stipends at or below these GSA maximums. If stipends exceed the GSA limit, the excess becomes taxable.
The 12-Month Rule
If you work — or expect to work — in the same metropolitan area for more than 12 months out of any rolling 24-month period, that location becomes your new tax home. Once that happens, your stipends for that location become taxable from the start. This rule is based on expectation, not just the calendar — so extending a contract that would push you past 12 months can trigger it immediately.
What Records to Keep
The IRS can audit your tax-free stipends going back several years. Maintain thorough records including: lease/mortgage documents, rent payment receipts, travel contracts, mileage logs between assignments, utility bills at your tax home, and proof of returning to your tax home regularly.
Using a family member's address without paying rent. Taking stipends while not actually duplicating expenses. Staying in one city beyond 12 months. Not keeping documentation. These are the most common audit triggers for travel therapists.
Download the Complete Tax Checklist
Printable PDF with everything you need to stay IRS-compliant. Keep it with your tax documents.
Ready to Travel Without the Tax Stress?
Working with an agency that understands tax homes and pay structure makes all the difference. A PT-owned agency with transparent pay packages can help you maximize your tax-free income while staying compliant.