Locum Tenens Taxes

Locum tenens taxes are the filing, payment, and substantiation questions that arise when a physician takes temporary assignments away from a regular practice setting. Many locum contracts pay on Form 1099. Some pay W-2 wages. The tax treatment follows the facts of the relationship, not the word “locum” on a contract.

This page focuses on tax home, temporary assignments, travel costs, reimbursements, and multi-state filing. It is not a generic travel-deduction essay, and it is not a second copy of the independent-practice expense table. Broader 1099 deduction categories are in 1099 physician tax deductions.

1099 locum income

If the locum work is independent contractor activity, receipts generally belong on Schedule C. Self-employment tax generally applies to net earnings. Estimated tax may apply because the payer typically does not withhold the way a hospital payroll does. See the IRS independent contractor guidance, Topic 762, self-employment tax guidance, and estimated taxes.

Receiving a Form 1099 does not, by itself, prove classification is correct. Worker classification depends on facts and circumstances. If the facility controls the work the way it controls employees, the tax file may belong on a W-2 even if the first payment arrived outside payroll.

Report locum income even if a payer does not issue a form.

Tax-home concept

Travel deductions generally require a tax home. Publication 463 treats a tax home as the regular place of business or post of duty, regardless of where the family home is. If the physician has more than one regular work location, the tax home is generally the main place of business, considering time, business activity, and income. A physician who has no regular place of business and whose home is not in a real business sense a tax home may be considered an itinerant; in that case the tax home may travel with the assignment, and travel “away from home” deductions may not apply. See IRS Publication 463.

For locum work, the practical questions are:

• Is there a regular clinical base, office, or hospital post that still functions as the main place of business?
• Is the family residence in that same area, or is it a personal home in a different city?
• Has the physician given up a regular post and started moving assignment to assignment with no main business location?

Do not assume that keeping a Florida condominium automatically creates a Florida tax home, or that sleeping in assignment housing automatically creates a tax home in the work state.

Temporary versus indefinite assignments

Publication 463 distinguishes temporary work away from the tax home from indefinite work. Travel expenses at the assignment location are generally not deductible if the assignment is indefinite. A temporary assignment is one that is expected to last, and does last, for one year or less. If employment away from home is realistically expected to last longer than one year, it is generally indefinite from the start, even if it ends sooner. Expectation can change; when it does, the remaining period is analyzed from that point.

A 10-week locum that is expected to end in 10 weeks is a different travel analysis from a “temporary” post that keeps getting extended with no realistic end date. Document the expected duration at the start of the contract and any extensions.

This is not a promise that every sub-one-year locum produces deductible lodging. Tax home, business purpose, reimbursements, and personal days still control.

Travel, lodging, transportation, and meals

If the physician is traveling away from a tax home on a temporary assignment, Publication 463 is the framework for transportation, lodging, and meals. Ordinary commuting between a residence and a regular local hospital is generally personal. Airfare, rail, or driving to a distant temporary post is a different question from driving across town to a long-standing workplace.

Meals while traveling away from home, if otherwise allowable, are generally subject to a 50% deduction limit and substantiation rules. Personal sightseeing, family travel that is not for the assignment, and luxury upgrades that are not ordinary and necessary do not become deductible because the trip included clinical shifts.

Keep:

• assignment dates and expected duration,
• travel dates that match those shifts,
• lodging folios,
• mileage or ticket records,
• a short note of business purpose.

Personal versus deductible costs, and reimbursements

Personal living costs at the tax home remain personal. Duplicate housing is the issue Publication 463 is built to analyze: extra lodging while away, not the mortgage on a residence the physician would have paid anyway.

If the locum agency or facility reimburses lodging, travel, or meals, do not deduct the same costs again. Accountable-plan reimbursements that are treated as non-taxable expense repayments are not a second Schedule C deduction. Taxable stipends included in 1099 or W-2 income are a different fact pattern: the income is in the return, and any deduction still has to satisfy the travel rules on its own.

Read the contract. “Housing provided” can mean a facility apartment, a stipend, or a capped reimbursement with receipts required. Each treats the physician’s out-of-pocket remainder differently.

State filing and multiple-state work

A locum assignment can create a filing obligation in the work state even when the physician’s residence state has no personal income tax. Multiple assignments can mean multiple nonresident returns, credit-for-tax-paid-to-other-state issues, and local income or occupational taxes in some cities.

Federal estimated tax does not pay a state balance. Each work state’s tax authority sets its own withholding, estimated-tax, and nonresident rules. Keep a location log of shifts by state. A Florida tax home does not erase another state’s tax on work performed there.

Withholding and estimated-tax considerations

W-2 locum wages may already have withholding. 1099 locum income generally does not. If the physician also has a hospital job, mixed withholding and estimates need a combined plan. Payment timing is covered in quarterly estimated taxes for physicians. Mixed wage-and-contractor years are covered in W-2 and 1099 Doctor at the Same Time.

Do not assume a large hospital W-2 withholding covers a busy locum year in another state.

Recordkeeping, contracts, and reimbursements

A locum file that supports the return usually includes:

• contracts and amendments, including expected duration,
• a shift calendar by location,
• Forms W-2 and 1099, plus a payer summary for missing forms,
• reimbursement policies and payment confirmations,
• lodging, transportation, and meal substantiation,
• notes separating personal days from assignment days,
• licenses, credentialing, and malpractice invoices tied to the locum activity.

Those records also prevent duplicate deductions when a recruiter or hospital already paid the hotel.

Mixed hospital W-2 and locum 1099

Many physicians keep an employed position and add weekend or between-job locums. Expenses of the employed job are not automatically locum deductions. Mileage to the regular hospital is still generally commuting. A conference that supports both roles may need an allocation. Coordinate income streams rather than dropping every professional receipt onto Schedule C.

Original example: one temporary out-of-state assignment

Consider Dr. Chen, a hypothetical physician whose regular clinical post and tax home are in Florida. She accepts a 12-week locum in another state. The contract states a 12-week term with no extension language at signing. She incurs $8,000 of lodging, $2,400 of transportation between Florida and the assignment, and $1,800 of meals during the assignment weeks. The client reimburses $6,000 of lodging against receipts. Dr. Chen pays the remaining $2,000 of lodging, all transportation, and all meals. These figures illustrate which costs require analysis. They are not a deduction schedule.

Cost	Amount	What the file has to answer
Lodging paid by Dr. Chen	$2,000 after a $6,000 reimbursement	Was she away from a tax home on a temporary assignment? The reimbursed $6,000 should not be deducted again.
Transportation	$2,400	Is this travel to a temporary post, or personal travel mixed with the assignment? Do tickets and dates match the 12-week term?
Meals	$1,800	If travel-away-from-home rules are met, meals are still generally limited and must be substantiated. Personal meals on days off need a harder look.
Regular Florida housing	Not in this table	Duplicate housing is the travel question. The Florida residence cost is not converted into a locum deduction merely because she worked elsewhere.

If the facility later extends the assignment with a realistic expectation of lasting more than a year, the remaining period may leave the temporary category even if the first 12 weeks were expected to be short. If Dr. Chen has no regular Florida post and is moving from locum to locum, the tax-home conclusion can change, and the same invoices may fail the “away from home” test.

Do not treat the $12,200 of gross travel spend as a deductible total. Start from reimbursements, tax home, duration, and substantiation.

Explore MFS services for healthcare professionals or speak with an advisor about locum assignment records and multi-state filings.