Is Travel Therapy a Good Option for New Grads During COVID-19?

Over the last few weeks, we’ve had dozens of new grad and soon-to-be new grad therapists reach out to us asking if now is a good time to start traveling as a new grad. This happens every year during May when the bulk of therapists graduate, but with all the uncertainty currently and full time therapy work being difficult to come by in some locations, there’s been much more interest in travel therapy than normal this year. Unfortunately, when there is uncertainty in healthcare, it is rarely a good thing for the travel therapy market, and the COVID-19 pandemic is no different.

While travel therapy has historically been a good career choice over the last decade for many therapists, including new grad therapists, things have really been shaken up recently. Let’s dive in to why travel therapy has been affected and whether or not it’s a good time for new grads to be trying travel therapy.

Travel Therapy During the Pandemic

As we all know, the COVID-19 pandemic has had a widespread impact on our world, including US healthcare jobs. “Uncertainty” is the buzz word as we all wait and see what will happen as the situation continues to evolve worldwide.

A big reason why uncertainty impacts the travel therapy job market to such a large degree has to do with the cost of hiring travel therapists incurred by facilities. Travel therapists can be significantly more expensive than full time and PRN staff, so in a situation where caseloads could suddenly decrease, many facilities don’t want to risk spending money on a traveler that they may end up not needing. Instead, they’ll make do with current staff while supplementing with PRN or offering overtime to full time therapists if needed, and wait out the uncertainty.

In the past two months we’ve seen hundreds of travel contracts ended early or cancelled before they even started due to fluctuations in caseloads in all settings. There has been a significant decrease in the number of new travel job openings due to facilities not hiring. With that being said, settings have certainly not all been affected evenly. Outpatient and school contracts have been the hardest hit by contract cancellations and job cuts, with home health, acute care, and SNF jobs impacted to a lesser degree. Even in the lesser impacted settings, COVID has still caused problems. This is primarily due to the fact that elective surgeries have been limited or cancelled altogether for almost two months now. Fewer elective surgeries means fewer patients across the board.

Flooding the Market

Less patients means less demand for therapists and subsequent layoffs across the board, not only in the form of travel therapy job cancellations but also for permanent full time staff. Some of the laid off permanent therapists are unable to find work in their area right now and are turning to travel therapy for some respite during tremulous times. This is bad news for current and prospective new grad travel therapists.

The combination of previously permanent therapists, new grads, and current travelers whose contracts have come to an end or were ended prematurely all looking for travel contracts at the same time, has caused the travel therapy market to get flooded with therapists searching for jobs. This flood of job seekers, combined with a reduction in overall jobs, has led to significant over-saturation of the travel therapy job market.

The impact is evident in the number of open travel contracts available and the declining pay rates offered on those contracts. The recruiters and companies that we work closely with are all reporting about 10 times less travel therapy jobs currently for PTs and OTs when compared to earlier this year before the pandemic. When comparing to the travel market at this time last year, the numbers look even more grim.

The travel jobs that are available are getting many more applicants submitted than normal and are closing very quickly. In some cases jobs will get to the maximum number of applicant submissions in a matter of a couple hours. With facilities getting so many submissions for their available travel contracts, a natural consequence is reductions in the bill rates offered, meaning lower pay for travel therapists. In nominal terms, this manifests as a reduction of about $100-$200/week on average for many of the open jobs.

What Does This Mean for New Grads?

Due to a minimal number of travel therapy jobs open at any given time currently, higher competition for those few jobs, along with lower pay, we can definitely say that now certainly isn’t the best time for new grads to begin travel therapy careers.

If at all possible, our recommendation right now would be for new grads to consider finding a full time or PRN position for a few months to a year to save some money and get some experience until things improve.

It certainly doesn’t hurt to consider travel jobs as an option and be on the lookout for travel job opportunities, but we encourage you to keep your options open and consider all job opportunities available to you, including perm and PRN locally.

Actions to Take for Those Dedicated to Pursuing Travel Therapy as a New Grad Currently

If you’re set on starting out as a new grad travel therapist despite the current environment, there are a few things you can do to have the best chance of finding a contract.

  1. Be willing to accept lower pay now than during normal times.
    • We’re always advocates of being informed and understanding how travel therapy pay works prior to jumping in, in order to avoid inadvertently taking low ball offers from non-reputable companies and recruiters. However, in this situation, you should expect for pay to be lower due to the declining bill rates mentioned above. Unfortunately, even though we normally recommend avoiding any pay rates less than $1,500/wk after taxes, there are some contracts paying travel PTs in the $1,300/week range right now that are still getting tons of submissions.
  2. Work with at least a few different good companies and recruiters.
    • This is more vital than ever right now. Having a few recruiters from different companies helping you search for jobs leads to more options and a better chance of finding a travel contract that will work for you. If you need help finding reputable companies and recruiters, fill out our recruiter request form, and we’ll match you with some that should work well for you.
  3. Be more flexible on travel assignment setting and location.
    • In the past, Whitney and I have been able to find consistent contracts close to each other in the states and settings that we prefer. Currently that just isn’t possible. To have a chance of finding a travel contract in the coming weeks (possibly months) as a new grad, it is important to be lenient on location and setting as much as possible. In the future when the travel therapy market picks up again, you can go back to being more selective with regards to setting and location. And even better, by that time you will have experience under your belt and will be more competitive when applying to the setting and location of your choice.

The Future of Travel Therapy

With states beginning to open back up and elective surgeries beginning to commence again across the country, the need for therapists will undoubtedly pick back up, and with that, we anticipate the travel therapy job market will improve. In addition to patients undergoing elective surgeries, patients that have become deconditioned due to COVID will require skilled therapy to a larger degree than before in SNFs, home health, outpatient, and inpatient rehab facilities. It’s hard to say exactly how long it will be before the travel therapy job market gets back to normal completely, but in the last couple of weeks we’ve seen things starting to trend upward, which is a good sign. Once demand picks back up and travel jobs are more prevalent, increases in travel pay back to normal levels should follow.

We are optimistic that demand will increase in the coming months and travel therapy will once again be a great option for new grads, like it was for us back when we started traveling as PTs after graduation in 2015!

If you have any questions or need help getting started, feel free to contact us. We’ve helped well over 1,000 new and current travel therapists to be better informed over the past few years! Best of luck & stay safe!

Written by Jared Casazza, PT, DPT

Jared has been a traveling physical therapist since 2015 and travels with his girlfriend and fellow travel PT, Whitney. Together they mentor other current and aspiring travel therapists.

Travel Therapist Health Insurance Options Explained

Written by: Jared Casazza, PT, DPT

It’s currently the 2019 marketplace health insurance open enrollment period, so naturally there is a lot of interest in health insurance options and alternatives right now. I’ve seen a ton of posts recently in various travel healthcare groups regarding health insurance options, alternatives, and people asking for general advice. Navigating the various health insurance options can be tough, especially with the many changes in the past decade and likely many changes to come in the future. Rising healthcare, and therefore health insurance, costs are a major concern for most Americans currently.

For travel healthcare professionals, health insurance is a particularly common topic since our contracts are generally only 13 weeks at a time, and figuring out what to do about health insurance after a contract ends can be confusing. I want to explore the various options here and hopefully give you some insight to help you make a decision regarding your own health insurance as a travel therapist.

Company Sponsored Health Insurance

Usually the cheapest and easiest option for a traveler is to take the company sponsored health insurance through the travel company that he/she is working with. The lower cost compared to other options is due to the fact that the company sponsored health insurance is partially paid for by the travel company as part of your total benefit package. The company pays a portion of your health insurance premium (in some cases 75% or more of it) so that it’s more affordable for you. If you pass up this benefit, in some cases the company will be able to give you slightly higher weekly pay based on the money they save from not having to pay for a portion of your health insurance, but this can have potential legal implications for the company if done incorrectly so it is not a common practice. We have never talked to a travel company that doesn’t offer health insurance, but it’s possible there are some small companies out there that don’t. The company would have to be very small though, because any company that employs more than 50 people is required to offer health insurance to all employees.

Most companies offer 2-3 different plans based on your individual needs. There will likely be at least a high deductible plan that offers a relatively low premium and a lower deductible plan with a higher premium. Which plan you choose depends on your own needs, but in general, those who are young, healthy and therefore unlikely to meet the deductible of either plan are better to choose a high deductible plan with the lower premiums, while those with more medical needs or perhaps growing families can often come out better with a lower deductible plan while paying the higher premiums.

In my experience, the premiums on these plans are pretty affordable no matter which plan you choose. I’ve paid anywhere from $5-$25/week for my company provided health insurance coverage over the past few years. Luckily, I rarely have any need to use the health insurance, but when I have needed it the coverage has been sufficient for my needs.

Signing up for a company sponsored plan should be very straight forward with guidance offered by your recruiter or by the benefits department of the travel company. You should be eligible to sign up for the coverage any time that you start a new contract with a company. Most companies offer health insurance benefits starting on the first day of your assignment, but some require you to wait for 30 days or until the first of the month before they take effect, so make sure to ask your recruiter about this to avoid any problems or confusion.

Affordable Care Act (ACA) Marketplace Plans

Some travelers choose to go with one of the ACA marketplace options available to them and forego the company sponsored options. The marketplace plans will almost always cost more than the employer sponsored plans and, as mentioned above, this shouldn’t be a surprise since in this scenario you will be responsible for the entire premium amount instead of having the travel company pay for a portion of it. For some, the increased cost of the plan is offset by more variety with plan options that can allow the traveler to find a health insurance plan better suited for them. Since the marketplace offers subsidies based on the individual’s income from the previous year, there are cases where the subsidy amount will be high enough to actually make these plans even more affordable than the employer sponsored coverage. I’ll cover the income levels and subsidies available in the marketplace plan in depth in another article in the near future. Since the amount of subsidy you qualify for can drastically change the amount of various plans for you, it’s always a good idea to get some quotes for potential marketplace plans even if you will likely take the employer sponsored health insurance. The vast majority of travelers will qualify for at least a partial income based subsidy due to the level of taxable income that we receive, but how big the subsidy is will depend on your Modified Adjusted Gross Income (MAGI).

Getting quotes for various plans and signing up for one through the marketplace is pretty easy. Visit the healthcare.gov website and follow the steps to get started on the homepage. I’ve spent a lot of time on the website and have found it to be user friendly. One thing to remember with these plans is that you can only enroll during the open enrollment period (November 1 – December 15) each year or when you have a “Qualifying Life Event.” This means that if you choose to forego employer sponsored health insurance and miss the open enrollment period, you could potentially have to wait until January 1st of the next year to have coverage! Make sure to watch the dates and don’t miss the November 1st – December 15th window if you choose to go this route.

“Off-Exchange” Health Insurance Plans

The above two options are by far the most common ways that regular employees and travelers alike receive their health insurance. There are a much smaller number of people that either forego company sponsored health insurance or aren’t eligible and choose to not get coverage through the marketplace. They instead may choose “off-exchange” plans, which are plans offered directly through the insurer themselves or through a broker. These options vary based on the state in which you’re located. These plans are not eligible for the subsidies offered based on income through the ACA marketplace, which will be a huge downside for most travelers and make this option unrealistic. Without the subsidies, the plans are often much higher priced than employer sponsored plans or insurance plans offered through the ACA marketplace. To partially make up for the higher price tag, these plans can occasionally offer better coverage options than those found on the marketplace.

These plans will rarely be a good choice for travelers and probably shouldn’t even be considered in most cases. If you’re interested in learning more about the “off-exchange” plans, this healthinsurance.org article is a good resource.

Health Care Sharing Ministries

Even though this option is not technically health insurance at all, I would be remiss to not include it in this list. Health Care Sharing Ministries are organizations created to share medical costs between a group of people that have the same religious views. These organizations are very careful to spell out the fact that they do not actually offer health insurance, since they do not offer any guarantee to pay. This sounds scary, but in practice, they seem to work pretty well, and most of what I’ve read about them has been positive written by those enrolled.

This is how it works: everyone enrolled in their organization has a monthly premium and a stated deductible amount, just like with a normal health insurance plan. The money is then pooled and paid out to anyone enrolled that makes a claim, after the claim is verified by the organization. They cover the same things as most insurers, although there are some things that may not be covered due to religious reasons, which can include things such as birth control pills. To be eligible to enroll in these organizations, you generally must be a Christian and be dedicated to living a Christian life, which means abstaining from activities such as smoking cigarettes, using drugs, drinking in excess, or engaging in extramarital affairs. They also generally do not allow major pre-existing conditions like the ACA marketplace plans are required to do.

Health Care Sharing Ministries offer much lower premiums for their coverage, which is largely made possible by the fact that they are able to exclude those with severe medical conditions. These organizations’ plans are also not eligible for the subsidies offered by the ACA marketplace like the “off-exchange” plans above. More people are choosing to enroll in these organizations as health insurance prices continue to increase, with estimated membership between all Health Sharing Ministries at 340,000 people.

These plans may be a viable option for travelers, especially those that aren’t eligible for any subsidies through the ACA marketplace and don’t want to take the employer sponsored coverage, assuming that the traveler meets all of the criteria and is willing to accept risk involved. For more information on Health Sharing Ministries or to compare companies, this article is a good resource.

Why Not Always Go With the Employer Sponsored Health Insurance?

Since employer sponsored coverage is often the easiest and the cheapest option, you may be wondering why a traveler would ever choose to go a different route. The two most common reasons have to do with coverage between assignments and meeting the deductibles of the health insurance plan.

For those that choose to take time off between contracts, the employer sponsored plans can sometimes prove difficult. Most travel companies will allow you to stay on their plan for somewhere between 14-30 days between contracts, but that’s only if you take your next contract with them as well. If you take more time off between contracts than the company allows, or you switch travel companies for your next assignment, then this will mean a lapse in coverage during that time. Whitney and I have found ourselves in this position a few times in the past, and going without health insurance, even for a short time, isn’t ideal. Luckily, COBRA coverage exists for this reason, but I’ve found that many travelers don’t know about it. Sometimes this causes them to choose to forego the employer sponsored plan due to these anticipated lapses in coverage.

COBRA stands for Consolidated Omnibus Budget Reconciliation Act, and it basically gives an employee the right to continue his/her employer health insurance coverage after losing his/her job (which would be the case for a traveler between contracts). This coverage can last for as long as 18 months or until the employee finds a different health insurance plan. This is perfect for a traveler who is switching companies between contracts or taking an extended period of time off of work. It is important to note that when switching to COBRA coverage, your premium will increase due to your employer no longer paying a portion of it, but the cost should still be a reasonable, especially for a short duration.

My personal favorite part about COBRA coverage is that you have 60 days after your loss of employment to sign up for the coverage, and any medical costs incurred between the date you lost your coverage and the date you sign up for COBRA will be retroactively covered. What that means in practice is that if you have a month off between contracts, and you’re switching travel companies, you could wait the 30 days between contracts to see if you have any medical expenses. If you don’t, then you can skip signing up for the COBRA coverage altogether and save the  money on the premium since you didn’t need the health insurance during that time anyway. If you happen to have a big medical expense come up during that time (not unreasonable if getting to the next assignment involves driving across the country), then you can sign up for COBRA afterward and have it retroactively cover that medical expense. This is the best of both worlds since you’re protected either way, but you only have to pay for the coverage if you actually end up needing it during that time off.

The other big reason a traveler may choose not to take the employer sponsored health insurance is that he/she plans to usually meet his/her deductible amount throughout a normal year. This can be a problem if switching between companies, because each time you leave one plan and start another, your progress toward the deductible starts over and you lose the progress you’d made toward the deductible on the old plan. For someone with a lot of medical expenses (usually a chronic medical condition requiring expensive treatment or medication), having to start over on the deductible with new plans can mean a lot more money out of pocket than the money saved by using the employer sponsored plan. In this situation, I think it makes a lot of sense to go with a plan through the ACA marketplace and keep it while traveling, instead of switching plans often through different employers.

What’s My Choice When It Comes to Insurance?

Over the past three years, Whitney and I have always chosen to go with the cheaper employer sponsored health insurance plans through the travel companies. We generally choose the highest deductible plan offered since we don’t use our insurance often anyway and would rather have a lower premium. Between contracts, we forego insurance knowing that we can sign up for COBRA as needed. So far we have never actually incurred any medical expenses between contracts to make it worth it for us to sign up for the COBRA coverage retroactively. It does give us peace of mind knowing that it’s available if we needed it though.

Although that’s been our strategy in the past while working almost continuously throughout the year, in the future we will likely sign up for a health insurance plan through the ACA marketplace. This is because we plan to take several months off at a time to travel internationally, making the employer sponsored plan + COBRA combo not nearly as appealing.

Conclusion

For the average travel therapist, going with the cheaper health insurance offered by your travel company and using COBRA coverage for any gaps between contracts probably makes the most sense financially and logistically. For some cases it can be more reasonable to sign up for a plan through the ACA marketplace and decline the coverage offered by the travel company. This is especially the case with travelers who plan to take multiple months off between contracts or that often meet their deductibles and will have to start over on the deductible each time they switch between companies. “Off-Marketplace” plans will rarely make sense for a travel therapist since most of us will qualify for subsidies through the ACA marketplace that wouldn’t be possible with an off-marketplace plan. But, these are still another option to consider based on your individual situation. Health Sharing Ministries usually offer a lower premium than insurance plans offered through the marketplace, but they are more risky since they aren’t actually health insurance and therefore don’t offer any guarantee to pay. In practice, most people enrolled in the Ministries seem to be pretty happy with the coverage based on reviews for them. The requirements to be accepted into the Health Sharing Ministry you choose can be restrictive, and anyone that isn’t a Christian isn’t allowed to join.

Hopefully this helps to clear up the health insurance options available to you as a travel therapist. Keep in mind that health insurance (and healthcare in general) is likely to go through many changes in the near future, so make sure to check that things haven’t changed between the time I wrote this and when you’re reading it. I’ll do my best to keep this up to date as well.

If you have any questions about this or anything else travel therapy related, feel free to reach out to us. If you are new to travel therapy and would like help getting started or recruiter/travel company recommendations then we can help with that as well! Thanks for reading!

To Extend, or Not To Extend a Travel Therapy Contract?

Written by Travis Kemper, PT, DPT

Should I stay or should I go now?

How do you know when to extend a contract or when to move on? There is no definitive answer to this.

My fiancée Julia and I have extended contracts anywhere from 2 weeks in order to better accommodate our travel plans, to a full thirteen weeks at one contract. In general, we have found that we are usually ready to move on at the thirteen week point whether we extended or not. In all cases of extensions, we have been persuaded to stay partially by the facility having a desperate need for PT coverage.

In the future, we will only extend if it is in our best interest, and we will always ask for an increase in pay with an extension. Thus far we have gotten up to $200 net per week bonus pay with an extension.

Know Your Preferences

An extension is always a personal decision, and you need to know yourself. Many times a facility will approach you very early in the contract for an extension, so you need to understand your own preferences.

If you are like us, you may get an itch to leave starting about 10-12 weeks in. Extending causes that itch continue for the entire extension period.

However, many travelers, such as Jared and Whitney,  find they would rather do 4-6 month contracts, or even up to 1 year so they can get comfortable with the position and location before they move on, as well as earn guaranteed money and not have to deal with the hassle of moving. If that is you, extending can be a great way to earn some more money and have a little more stability in your life.

Signs That The Facility May Want an Extension

Sometimes you can get a feel during the interview if the facility is the type to want a traveler to extend or not. You can also sometimes get a feel for whether they are likely to keep you for the duration of your contract or if there’s a possibility your contract could get cut short.

If you can find out the reason why they need a traveler in the first place, that will give you a good idea. For example, maybe it’s a rural area and they have been using travelers back to back for a year or more. In that case, there’s a good chance you could stay there longer if you wanted to. Or maybe it’s not a rural area, and they’re still using travelers back to back and can’t find a permanent employee. Maybe then you should be hunting for reasons why they can’t keep permanent staff.

On the other hand, if someone just quit and they are rapidly trying to find a permanent employee and conducting permanent interviews, there’s a chance they might cut your contract the first chance they get when someone permanent is hired. This also might not be an ideal situation for you, especially if you are traveling a long way to take the job.

It’s a good idea to feel out these things early on, as it can definitely give you a good indication of what type of situation you’re getting into as a traveler. But, don’t always fear the rotating-traveler, begging for you to extend facilities. They’re not all bad, and you could have a great experience there and want to extend.

Do you have questions about contract extensions? Send us a message and we can chat! Want to tell us about an experience you had with a contract extension? Leave a comment below!

Opportunity Cost: Passing on a Travel Job and Having Unplanned Time Off

Written by Travis Kemper, PT, DPT

What is Opportunity Cost?

Opportunity cost is an important economic term that most of us rarely think about. An opportunity cost is quite simply a lost benefit from choosing one option instead of another.

Opportunity Cost and Travel Therapy

Why is this important and what does it have to do with travel therapy? We’ve seen a number of travelers post about a potential job opportunity that they were passing on due to the pay being too low for them by $100 or $200 per week. They say if the pay was higher they would take the position because everything else sounded great!

So let’s analyze the opportunity cost of passing on a position without a replacement position readily available:

  • John is a new grad traveler and receives an offer of $1500 per week that starts 10/1.  John turns down the position, stating that his minimum acceptable pay is $1650 per week because he wants to pay down his loans as fast as possible.  Good news, John finds a position paying $1650 per week that starts just 2 weeks later on 10/15, and he takes this position.
  • Sally also is traveling with the goal of paying down her loans quickly.  Sally takes the position for $1500 per week and starts 10/1.

Who makes out better financially?

  • Sally makes $1500 x 13 weeks= $19,500 net pay, 13 weeks after 10/1
  • John took 2 weeks off waiting for that bigger paycheck. 13 weeks after 13/1, John earns $1650 X 11= $18,150.

The opportunity cost for John is $19,500 – $18,150 = $1,350 in lost income, due to waiting for the higher paying position.

Conclusion

The moral of the story is that higher pay isn’t always higher pay if you have to wait to start. This is a very simplistic example, but as you can see, continually passing on “low pay” will hurt you financially in the long term if you take extra, unplanned time off.

We recommend you take the right job instead. Pay is important, but sometimes the highest paying positions can also be the least desirable positions.

If you have questions about a travel therapy position, pay packages, or need help in your travel therapy journey, please shoot us a message and we would be happy to help!

How to Find a Travel Therapy Company and Recruiter

Written by Travis Kemper, PT, DPT

The Importance of a Good Recruiter and Company

Your position is only as good as your company, and your company is only as good as your recruiter. We never want to fight over money, we want at least acceptable benefits, and we want a company that stands behind their travelers. At the end of the day, we are the talent, and they should want to keep us on their team by treating us right.

Don’t Make the Same Mistake

The biggest mistake my fiancée and I made early in the process was requesting more information from Allied Travel Career’s website. The calls, texts, and emails still haven’t stopped years later. When we did find recruiters that we liked and trusted, they disappeared (sometimes mysteriously), got promoted, or changed companies. Recruiters are in the sales business, and sales is a field with very high turnover. You are going to want recruiters that are in it for the long haul, are honest, and actually listen to your wishes.

The company is important as well.  Preferably they take care of your recruiter and you throughout your career as a traveler. Glassdoor.com and indeed.com are good places to start that can provide you employee reviews on just about any company you can think of.

A Few Considerations in Choosing A Recruiter

  • How long have they been with the company?
  • How many travelers are on their caseload?
  • Do they respond quickly to your calls, texts, emails?
  • Does the recruiter seem honest and transparent with you, or are they being shady and withholding information?

A Few Considerations in Choosing a Company

  • Look at their benefits package and make sure it meets your needs
    • Are you eligible for 401k, and if so when? Do they offer a company match?  What is the vesting schedule?
    • When does insurance coverage start, day 1 or day 30?
  • See if they offer any bonuses such as travel reimbursements, referral bonuses, overtime bonuses, contract extension bonuses, etc.
  • Do they offer 40 hour guarantees for contracts?
  • Do they cover costs of licensing, credentialing, and continuing education?

Picking the Right Company and Recruiter for You

There is a lot to take into account when choosing the best travel therapy company and recruiter. We definitely recommend working with 2-3 companies at a time to give yourself the most options when searching for a travel contract.

If you don’t want to go through the process of combing through the hundreds of companies and thousands of recruiters yourself, send us a message and we will send you to our most trusted recruiters!

Why Choose Travel Therapy?

Written by Travis Kemper, PT, DPT

My “Why” For Travel Therapy

Everyone’s “why” will be very personal and may be very different. My fiancée Julia and I are traveling for the freedom it provides. We enjoy not being tied down to one geographic location and not being obligated to work 50 weeks per year. There are too many things we want to do with our lives to settle down in a permanent position.

We want to travel, not for 2 weeks each year, but long enough to immerse ourselves in the culture of a new place. We would someday like to do international mission trips as well where we can use our skills and training to help others that have tougher challenges and decreased access to appropriate healthcare.

What’s Your “Why”?

You don’t have to want the same things I want, but you should know your why. Maybe it’s to travel, maybe it’s to pay student loans off, maybe it’s for financial independence. It could be that you completed 3-4 internships and have no idea what setting you want to practice in because your profession has too many awesome options (I can relate to this)! Maybe you’re burnt out in your current position and need a change of scenery.

Whatever your why is, you hopefully take it into consideration before embarking on a traveling or permanent career decision.  Your why can, and hopefully will, change as you grow as a person, but your why can always provide you with direction in your career and life.

So, what is your “why” for considering travel therapy? Shoot us a message or leave a comment below. We’d be happy to help you get started on your journey to pursuing travel therapy today.

Travel Therapy: What is a “Tax Home”?

Authors: Travis Kemper, PT, DPT; Jared Casazza, PT, DPT; Whitney Eakin, PT, DPT, ATC

What is a Tax Home?

If you are just starting out in travel therapy you may not be familiar with the concept of a “tax home.”  Basically, a tax home is your primary residence, where you live and/or work. When you’re working as a travel therapist, having a tax home allows you to take housing and per diem stipends provided by travel therapy companies without having to pay taxes on them due to the stipends being a reimbursement for costs incurred at the travel assignment location.

This is a major benefit for you and greatly increases your potential total compensation, if housing costs are kept at a reasonable amount, when compared to a permanent job, where all your income is taxed. This is the main reason why “take-home” pay (otherwise known as your after-tax pay, the money that actually goes into your bank account) as a traveler is higher than pay in permanent jobs.

But, maintaining a proper tax home is a little more complicated than just saying you “have” a permanent residence.

The Basics of Maintaining a Tax Home

To be allowed to take the untaxed stipends, per IRS guidelines, you need to be able to demonstrate at least two of the following three criteria:

  1. You must maintain a place of permanent residence and pay expenses there (i.e. rent, own/mortgage, pay bills, pay taxes, etc.) while ALSO paying expenses at your travel location. This is called “duplicating expenses.”
  2. You must not abandon your tax home. Generally speaking, you should return there at least 30 days per year but these days don’t have to be consecutive.
  3. You must still conduct business in the area of your tax home. For example, you have a PRN job there or maintain some type of other business there.

The third criteria is a little vague, as some interpret “conducting business” as having bank accounts and credit cards, car registration and insurance, and voter registration associated with the tax home, not specifically working in the area.

Without meeting at least 2/3 of these requirements, you would be considered an “itinerant worker,” and all of your income will be taxed.

There is nothing wrong with having all of your income taxed, and you may still come out ahead this way as compared with a regular, permanent job. But, we like to keep as much of our money as possible, so qualifying for the tax free stipends is ideal provided that maintaining your tax home isn’t so expensive that it negates the benefit.

To find out more about tax homes and all things about travel taxes, we recommend you check out the website TravelTax.com/traveler.html. (Specifically, scroll down to the section “how to keep a tax home”). This is a wonderful website where we have all learned a significant amount over the years.

What Are Some Strategies to Keeping a Tax Home?

Of course if you already own a home/have a mortgage, or rent an apartment, these can be maintained as your tax home. But this method can be more costly and also more complicated since you may not have someone to look after your place while you’re away. You may be thinking you could rent out your house while you are gone, but this is not advisable unless you specifically state in the lease agreement that you would maintain at least one room in the house as your own and you stay in that room while in the area (at least 30 days per year as mentioned above).

Perhaps a better option is renting a room out from your parents or a friend, which in our opinion is great way to maintain your tax home. Go on Craigslist, see what a comparable room rents for, and pay your family/friend to rent the room in their house. It’s also recommended that you have a contract written and signed. They will have to claim it as income on their tax returns, but they can keep the extra income to help around the home. That is the simplest way, and that is what we have been doing since starting to travel. As mentioned by Joseph Smith at Travel Tax, you ideally would also want to work in this new area for a while before traveling in order to solidify this new area as your tax home.

A more unique strategy that Julia and I are considering doing next year is house hacking for our tax home. House hacking is simply performed by purchasing a multi-unit home (duplex, triplex, quadplex), and renting out the other units, while you live in one unit.  Your tenants can effectively pay your rent and pay down your mortgage at the same time, enabling you to live for free or dramatically reducing your housing costs. You can find more information on house hacking here.

Do you have a different creative way of keeping a tax home? Do you have questions about tax homes? Send us a message and we can chat!