Travel Therapy Tax FAQ

IRS Publication 463: “Generally, your tax home is your regular place of business or post of duty, regardless of where you maintain your family home. It includes the entire city or general area in which your business or work is located.” Full tax guide.

Publication 463 looks at these factors: “You perform part of your business in the area of your main home and use that home for lodging while doing business in the area. You have living expenses at your main home that you duplicate because your business requires you to be away from that home. You haven’t abandoned the area in which both your historical place of lodging and your claimed main home are located, you have a member or members of your family living at your main home, or you often use that home for lodging.” Full maintenance checklist.

Publication 463: “If you satisfy all three factors, your tax home is the home where you regularly live. If you satisfy only two factors, you may have a tax home depending on all the facts and circumstances. If you satisfy only one factor, you are an itinerant; your tax home is wherever you work and you can’t deduct travel expenses.” See the full comparison.

Publication 463: “If your allowance is less than or equal to the federal rate, the allowance won’t be included in box 1 of your Form W-2.” And: “If your assignment is indefinite, you must include in your income any amounts you receive from your employer for living expenses, even if they are called “travel allowances” and you account to your employer for them.”

Publication 463, on an employee’s car: “The cost of using your car as an employee, whether measured using actual expenses or the standard mileage rate, will no longer be allowed to be claimed as an unreimbursed employee travel expense as a miscellaneous itemized deduction due to the suspension of miscellaneous itemized deductions that are subject to the 2% floor under section 67(a).” Deductions guide.

The IRS: “If the amount of income tax withheld from your salary or pension is not enough, or if you receive income such as interest, dividends, alimony, self-employment income, capital gains, prizes and awards, you may have to make estimated tax payments.” “If you receive salaries and wages, you can avoid having to pay estimated tax by asking your employer to withhold more tax from your earnings.” Estimated payments guide.

Two states’ own answers. New York: “A person who lives in one state but works in another may have tax liability in both states, but typically will receive a tax credit in their state of residence to eliminate double taxation of that income.” California: “During the nonresident portion of the year (or if you are a full-year nonresident), you will have California source income to the extent you physically performed services in California.” Multi-state filing guide.

Read from each state’s revenue department on October 6, 2026, states with no income tax on wages include Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas and Washington. Washington’s Department of Revenue adds: “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.” State tax details.

This page quotes the rules; a tax professional can apply them to your own contracts and states. How to find one.

The IRS: “Generally, you must keep your records that support an item of income, deduction or credit shown on your tax return until the period of limitations for that tax return runs out.” “The period of limitations is the period of time in which you can amend your tax return to claim a credit or refund, or the IRS can assess additional tax.” The IRS page lists the period for each situation.

The PT Compact Commission: “A compact privilege is the authorization to practice in a compact member state other than your home state. It is the legal equivalent to a state-issued license.” Tax is a separate question; California’s answer, for one: “During the nonresident portion of the year (or if you are a full-year nonresident), you will have California source income to the extent you physically performed services in California.”

An assignment expected to run more than 1 year is indefinite under Publication 463. The test, in its own words (IRS): “Generally, a temporary assignment in a single location is one that is realistically expected to last (and does in fact last) for 1 year or less.”