How Long Can a Travel Professional Stay in One Place?
As we’ve discussed in previous blogs, travel healthcare offers a world of opportunities, with the main benefit being the freedom to travel wherever you want, whenever you want – all while doing what you love. But if you’re new to the travel industry, you may wonder: How long are travel contracts? And how long can you stay in on place? In this post, we’ll answer these questions and explain how taxes can impact the length of your contracts.
What is the Typical Length of Travel Contracts?
Before diving into taxes, let’s start with the basics. Travel contracts can range anywhere from six weeks to a year, but the golden number is 13 weeks. Why 13 weeks? This period is considered ideal for travelers to gain new skills, familiarize themselves with the area, and explore local attractions. A 13-week contract also allows time for permanent staff members to complete orientation and learn the ins and outs of the facility. Essentially, travelers could work four contracts in a year, but some either take time off between contracts or extend their current contract, which we will discuss next.
If you have a contract length preference, let your recruiter know ahead of time so they can find the perfect assignment to meet your needs.
How Do Contract Extensions Work?
You may have heard of travelers extending their contracts. This means continuing your work at your current facility beyond the end of your existing contract, allowing you to avoid the process of applying for a new assignment. Travelers often ask to extend their contracts for several reason:
- Pay: Not every facility or location offers the same pay rate. If you’re earning a good income where you are, it may be beneficial to extend your contract to keep that financial momentum. Check out our Top Paying States for Travelers blog to learn more about where you can make the most money.
- Facility: During your assignment, you might build close relationships with the staff or find that the position aligns perfectly with your career goals. Other reasons for staying could include if the facility has a great culture that resonates with your interests and values, or if the hours you’re working are exactly what you hoped for.
- Location: Whether the assignment location is one on your bucket list or someplace entirely new, you may fall in love with the area during your stay. Maybe there are more sites you’d like to see or restaurants to try out. Extending your contract will help you get the most out of the location.
- Convenience: Extending your contract can be convenient since you already have housing arrangements and are familiar with both the facility and area. Plus, as mentioned earlier, extending allows you to bypass the application process and continue working without interruption.
So, how do you extend your contract? It’s quite simple! Your recruiter will reach out to you a few weeks before your contract ends to discuss the possibility of an extension. Many facilities are happy to extend your contact if they still have a need for a traveler and appreciate your work ethic. Make sure to inform your recruiter in advance so they can coordinate with the facility to work out the details of your contract extension.
Remember, you do not have to extend your contract if you choose not to! As a travel professional, you have the flexibility to take a break once your assignment is completed or to venture to a new location. You can always return to that facility in the future if they openings.
How Long Can Travelers Stay in One Place?
Now let’s look at how long you can stay in a single location, as tax laws play a big role here. First, it’s important to determine if you qualify for tax-free stipends. To quality for these tax-free reimbursements, you must have a tax home. If you do not have a tax home, the IRS will classify you as an itinerant worker, meaning that the IRS considers your tax home where you are working. As an itinerant travel professional, you can still work at the same location for as long as the agency and facility allow, but you will not be eligible for tax-free stipends such as lodging, meals, and transportation. Even if your agency provides these stipends, you will have to pay taxes on them when you file.
For travel professionals who receive tax-free stipends, the length of your stay in one place is significant. The IRS defines a tax home as, “the entire city or general area in which your business or work is located…regardless of where you maintain your family home.” This means that your tax home is more about where you work rather than where you call home. If you spend too much time in one location, your tax home may shift, resulting in tax liabilities for the tax-free stipends you received during your contract. To avoid this issue, it is recommended that you do not spend more than 12 months working at the same location with a 24-month period – commonly referred to as the “one-year rule.”
What is the One-Year Rule?
A general rule of thumb for travel professionals is to avoid working in the same city for more than 12 months. Some travelers believe they can extend their time in a city by changing facilities, but that is not accurate. If you work in the same city for more than 12 months, the IRS will designate that city as your tax home, and you will be required to repay any stipends received while working there.
On the other hand, you can work in the same state for longer than 12 months, provided you do so in different areas and do not stay in any one city for more than 12 months. Just ensure that no single city becomes your primary source of income during this time, as this could also cause your tax home to change.
How Long Do You Have to Work Somewhere Else Before You Can Return to the Same Place?
How long you must work at a different location before returning to the same place depends on three factors:
- How long you have already worked there
- How long you plan to work there when you return
- The percentage of annual income that area will account for
Let’s go over a few examples:
Example 1: Let’s say you work at a facility for 11 months. Afterward, you either take some time off or work PRN (as needed) at your local hospital for one month. Once that month is over, you return to the same facility for a new contract. Since contracts typically last 3 months, but returning after that break, you would have exceeded the 12-month limit within a rolling 24-month period. Thus, your tax home would change.
Example 2: Now let’s say you work at a facility for 13-weeks (3-months). After that, you either take some time off or work at another facility for the next 6 months. Then you return to that same facility for another 13-week contract and continue repeating this process. Technically, you are never working at the same facility for longer than 12 months within a 24-month period. However, if your income from that facility exceeds what you earn at your tax home or any other location, you tax home could still shift.
It is important to carefully track how much time you spend at each facility to ensure you do not exceed 12 months in any rolling 24-month period at the same location. Additionally, make sure that the majority of your income does not come from one location for too long to help maintain your tax home and prevent you from losing your stipend.
Travel healthcare offers unmatched flexibility and adventure, but understanding contract lengths and the impact of tax rules is essential to make the most of your career. Keep these guidelines in mind, stay in close contact with your recruiter, and track your work locations to ensure a smooth, rewarding journey.