TAX BULLETIN – Tax Tips, News, & Updates: Issue No. 1 | Vol No. 7

A major trend in the healthcare industry is travel nursing and travel doctors going from state to state to work due to the shortages of doctors, nurses, and caregivers etc., specifically in rural states. I have been asked so many times about this phenomenon and the impact it will have on taxes. Consequently, in this month’s bulletin we highlight the general themes of traveling for work, with specific focus on healthcare professionals.

Information for Contract (Travel) Workers!

Many states have their own policies regarding the tax ramification for income and expenses while traveling for work. However, there are several benefits to traveling and working outside of your home state. One of the major benefits of working as contract doctors, nurses, etc. is the opportunity to spend extended periods living and working away from your home state. Generally, you will receive a 1099 NEC from the parent contract company, and you can file your taxes regularly at the end of the year. However, we also recommend paying as you earn; meaning you should pay estimated taxes quarterly to avoid paying penalties and interest for late payment.

Generally, if you stay (and work) in a state for 183 days, the state considers you a resident.

SSCPA Consulting, LLC advises and prepares the estimated and annual taxes on your behalf and recommends you maintain all receipts and records relating to your deductible expenses. This includes:

Multiple State Issues

Generally, if you stay (and work) in a state for 183 days, the state considers you a resident, even if you maintain domicile residence in your home state. Working in multiple states for extended periods can subject you to multiple state tax rules, filing, and paying multiple state taxes. Of course, this depends on how your contracting company issues the 1099 NEC and files it with the IRS and state authorities, for each state you worked in. This will be in addition to your domicile tax home or state of permanent residence. In these instances, you’ll usually have to file non-resident returns for the state you work in. Certain states offer residents credits to offset taxes paid to other states. There are a few ways to avoid being taxed on your total income across multiple states, such as establishing another domicile or taking advantage of reciprocity agreements between states. If you are lucky, you may be contracting in one of the following states without income tax, which helps avoid paying taxes in multiple state.

WE HOPE YOU ENJOYED & LEARNED FROM THIS MONTH’S BULLETIN!

Contact us for more information which is specific to your situation as there are always exceptions to the IRS rules and specific to the states’ rules!