Locum CRNA Taxes Explained (1099 Guide)

Taxes are one of the most important — and often least understood — aspects of working as a locum tenens Certified Registered Nurse Anesthetist (CRNA). Because many locum CRNAs are paid as independent contractors rather than traditional employees, tax responsibilities can differ significantly from those of permanent positions.

This guide provides an educational overview of how taxes typically work for locum CRNAs, with a focus on 1099 income, common considerations, and areas where professional guidance may be helpful. It is intended to explain general concepts rather than provide individualized tax advice.

Are Locum CRNAs Employees or Contractors?

Locum CRNAs may be classified as either independent contractors or employees, depending on how an assignment is structured.

1099 vs. W-2 Basics

Many locum CRNAs are paid as 1099 independent contractors. Under this arrangement, the CRNA is not considered an employee of the facility or agency and is responsible for managing their own taxes, benefits, and business-related expenses.

Some locum roles, however, are structured as W-2 positions. In these cases, taxes are withheld by the employer, and limited benefits may be provided. The classification depends on factors such as contract terms, level of control over work, and how the relationship is structured.

Understanding whether a locum role is 1099 or W-2 is essential, as it directly affects tax obligations and take-home pay.

Self-Employment Taxes Explained

Locum CRNAs working as independent contractors are generally considered self-employed for tax purposes.

Federal Tax Overview

Self-employed individuals are responsible for paying both income tax and self-employment tax, which typically covers Social Security and Medicare contributions. Unlike W-2 employees, these taxes are not automatically withheld from each payment.

As a result, locum CRNAs must plan ahead to ensure sufficient funds are set aside to cover tax liabilities.

Estimated Quarterly Payments

Independent contractors are often required to make estimated quarterly tax payments to the Internal Revenue Service (IRS). These payments are intended to cover income and self-employment taxes throughout the year.

Failure to make adequate estimated payments may result in penalties or interest, which is why many locum CRNAs work with tax professionals to determine appropriate payment amounts.

For locum CRNAs, estimated payments are as much a cash flow consideration as a compliance requirement. Because income may arrive in irregular intervals, setting aside funds consistently can help reduce year-end surprises.

Payment timing can also become more complex when assignments start or end mid-quarter, or when income fluctuates significantly from one period to the next.

Common Tax Deductions for Locum CRNAs

Independent contractors may be eligible to deduct certain business-related expenses. Whether an expense is deductible depends on individual circumstances, documentation, and applicable tax rules.

Travel Expenses

Travel costs related to locum assignments may be deductible in some situations. These can include transportation to and from assignment locations when travel qualifies as business-related.

Housing Expenses

Temporary housing costs incurred while working away from a primary residence may be deductible under certain conditions. The deductibility of housing expenses depends on factors such as tax home designation and assignment duration.

Tax Home Considerations

The concept of a “tax home” plays an important role in determining how certain expenses are treated for tax purposes. A tax home is generally associated with a CRNA’s primary place of business or residence, rather than the location of a temporary assignment.

For locum CRNAs who move between assignments, establishing and maintaining a consistent tax home can be complex. Factors such as assignment duration, regular work location, and ties to a primary residence may all be considered when evaluating tax home status.

Because tax home determinations can affect how travel and housing expenses are viewed, this is an area where misunderstandings are common and professional guidance is often sought.

Licensing and Credentialing

Professional expenses such as state licensing fees, credentialing costs, and required certifications are often considered ordinary business expenses for locum CRNAs.

Continuing Medical Education (CME)

Costs associated with maintaining licensure and certification, including CME courses and required education, may qualify as business-related expenses when they are necessary to continue practicing.

Because deductibility rules can be complex, proper recordkeeping and professional guidance are essential.

Recordkeeping & Documentation

Accurate recordkeeping is a foundational part of managing taxes as an independent contractor. Locum CRNAs often juggle multiple assignments, payment sources, and expense categories throughout the year.

Maintaining organized records of income, contracts, travel details, and professional expenses can help simplify tax preparation and reduce uncertainty if questions arise later.

Many CRNAs choose digital tools or accounting software to centralize records, while others work directly with tax professionals who provide documentation guidelines.

State Taxes & Multi-State Work

Locum CRNAs frequently work in multiple states, which can complicate state tax obligations.

Filing in Multiple States

Income earned in a state where a CRNA performs services may be subject to that state’s income tax, even if the CRNA does not reside there. This can result in the need to file tax returns in multiple states during the same year.

Each state has its own rules regarding income sourcing, thresholds, and filing requirements.

Residency Considerations

A CRNA’s state of residency plays an important role in determining overall tax obligations. Some states offer credits for taxes paid to other states, while others have unique residency or domicile rules.

Understanding how residency and work location interact is especially important for CRNAs who take assignments across state lines.

Tax Implications of Time Off

Unlike W-2 employees, locum CRNAs are typically not paid during periods without active assignments. Time off between contracts may reduce taxable income for the year, but it can also affect cash flow and estimated payment calculations.

Understanding how gaps between assignments interact with tax obligations is an important part of financial planning for locum work, particularly for CRNAs who value extended breaks or seasonal schedules.

When to Work With a CPA

Given the complexity of self-employment taxes, multi-state income, and potential deductions, many locum CRNAs choose to work with a Certified Public Accountant (CPA).

Tax professionals who are familiar with healthcare providers or independent contractors can help with estimated payments, compliance, and long-term planning. Specialization matters, as general tax preparation may not address the unique issues faced by locum clinicians.

Professional guidance can also help reduce the risk of errors, penalties, or missed obligations.

Important Disclaimer

This article is intended for general educational purposes only and does not constitute tax, legal, or financial advice.

Tax laws, regulations, and interpretations can change, and individual circumstances vary widely. What applies to one locum CRNA may not apply to another.

Locum CRNAs should consult with a qualified tax professional or advisor who is familiar with independent contractors and healthcare providers to address their specific situation and ensure compliance with all applicable laws.