State-by-State Tax Guide for Travel Therapists
A travel therapist generally owes state income tax to each state they work in that taxes wages and to their home state, and New York's tax department says the home state typically gives a credit so the same income is not taxed twice. Each state sets its own test for who is a resident, separate from the federal tax home that keeps your stipends untaxed, and some states, such as Texas and Florida, have no state income tax at all.
No-Income-Tax States
*New Hampshire does not tax W-2 wages, and its Interest and Dividends Tax was repealed for taxable periods beginning after December 31, 2024 (NH Department of Revenue Administration). †Washington’s Department of Revenue: “Beginning Jan. 1, 2028, a new 9.9% income tax will apply to individuals and married couples filing jointly with annual adjusted gross income exceeding $1 million.” (WA DOR)
How Multi-State Filing Works
You'll generally file: (1) A resident return in your tax home state reporting ALL income. (2) A non-resident return in each state where you worked (if it has income tax). (3) Credits for taxes paid to other states to avoid double taxation.
Example
Tax home in North Carolina, working assignments in Georgia (13 wks), Virginia (13 wks), Florida (13 wks). You'd file: NC resident return (all income, credits for GA/VA taxes), GA non-resident return, VA non-resident return, no FL return (no tax). That's 3 state returns plus federal. Filing in more than one state walks through each return. If you're planning next year's states, tell a recruiter which ones you'd consider: Find my next contract.
Reciprocity Agreements
Some states have agreements where residents working in the partner state only owe tax to their home state. Common pairs affecting travelers: Virginia/DC/Maryland/West Virginia, Illinois with neighboring states, Indiana/Pennsylvania with neighbors.
State Tax Rate Overview
| Category | States | Top Rate |
|---|---|---|
| No Income Tax on Wages | AK, FL, NV, NH, SD, TN, TX, WA† | 0% |
Remember: whether a state follows the federal treatment of your stipends is set by that state; ask a tax professional who knows your home and work states.
Special Considerations
California
Taxes nonresidents on income from services physically performed in California (Franchise Tax Board). Ensure bulletproof tax home documentation for CA assignments.
New York
State taxes plus NYC city taxes (if assigned in NYC) add up significantly. Upstate assignments avoid the city tax.
PT/OT Compact vs. Tax Reciprocity
Licensure compacts (PT Compact, OT Compact) allow multi-state practice but don't affect taxes. You still owe state income tax where you work regardless of compact status.
Minimizing State Tax
Choose your tax home state wisely — a no-tax state saves every year. Seek low/no-tax assignments when pay is comparable. Track work days per state carefully. File on time everywhere — penalties apply separately per state. Work with a multi-state CPA to make sure you claim every credit.
Need Help With Multi-State Taxes?
Ask a ProTherapy recruiter for every line of a package before you sign.