"Would my parents home count as my tax home since I will be living there in between contracts? "
Yes
Will you be paid as an employee or as a contractor? If as an employee, the rest is easy - your home arrangements won't matter.
As you know these are the tests for a tax home:
"There are three objective factors used to determine the bona fide nature of a taxpayer’s assertion that the claimed abode is the “regular place of abode in a real and substantial sense”:
1. Whether the taxpayer performs a portion of the business in the vicinity of the claimed abode and uses such abode (for lodging purposes) while performing such business there;
2. Whether the taxpayer’s living expenses incurred at the claimed abode are duplicated because business requires the taxpayer to be away therefrom; and
3. Whether the taxpayer
a. has not abandoned the vicinity in which the historical place of lodging and the claimed abode are both located;
b. has a member or members of the family (marital or lineal only) currently residing at the claimed abode, or
c. uses the claimed abode frequently for purposes of lodging."
It is not required that you have all of these in equal measure but merely that the preponderance of evidence is in your favor.
If you go home on a regular basis between contracts (one court case suggested at least 30 days a year), then you satisfy 3.c.
Clearly, if you live with your parents, you satisfy 3.b.
Do you intend to have your mail sent to your parents' home? Do you intend to file your tax return using your parents' address? That satisfies 3.a.
When you are at home, what thing do you pay for? Rent (such as it is), food, meals, car payments? The IRS, as you have seen, does not make clear distinctions here, but I would suggest that whatever you do, put it in writing, "In order to help Mom & Dad stay in that house, I will pay for X, Y, and Z."
As for #1, Do you ever need to take training, like to stay certified? Where are you when you do this? At home? All the better.
You might also want to read this article by KPMG.
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