Tax credits for domestic travel
The One Big Beautiful Bill, signed into law on July 4, 2025, includes a new incentive aimed at boosting tourism within the United States: a domestic travel tax credit. This credit offers up to $4,000 per individual—or $8,000 for couples filing jointly—for qualifying travel expenses within the U.S. The idea behind it is to encourage Americans to explore their own country and support domestic hospitality and tourism industries, many of which are still recovering from economic slowdowns and shifting travel trends.
The credit is refundable, which means even if you don’t owe any federal taxes, you could still receive the full amount as part of your tax refund. That makes it more accessible to a broader range of people, including retirees and lower-income households. To qualify, travelers must incur expenses related to domestic trips that take them more than 50 miles from home. Eligible spending includes hotel stays, meals, flights, rental cars, train tickets, and even live entertainment or events attended during the trip.
While the official implementation date hasn’t been finalized, the credit is expected to take effect beginning with the 2026 tax year. The IRS will issue specific guidance on how to document and claim these expenses. For now, travelers should keep detailed records and receipts for qualifying trips, especially if they’re planning travel for 2026 and beyond.
This tax credit arrives at a time when international travel to the U.S. is becoming more expensive and complicated, with new fees and fewer marketing dollars allocated to attract foreign visitors. In contrast, the domestic travel credit shifts focus inward, rewarding Americans for spending their vacation dollars at home. Whether it’s a road trip, a national park visit, or a weekend in a new city, those expenses could now come with a significant tax break.
Ultimately, the credit is designed to make travel more affordable, stimulate local economies, and give Americans another reason to take time off and explore the country. If you’ve been putting off a domestic vacation, 2026 might be the year to go.
