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Deciphering travel nursing pay and tax rules is one of the most complicated aspects of being a travel healthcare provider (HCP). Tax homes, tax-free stipends, hourly wages, bonuses, benefits, housing and per diem reimbursements are all vital in understanding your travel nursing pay package and your taxes. Now that the 2023 tax season is in full swing, many travel nurses have questions that Vivian Health hopes to answer with some help from Brittany J. Benson, Esq., a lead tax research analyst in The Tax Institute at H&R Block.
The Inside Scoop on Taxes for Travel Nurses & Other HCPs
Benson has nine years of tax experience and specializes in tax issues that affect individuals, international taxpayers and small business owners. She’s also a licensed attorney in the state of Missouri. We asked her several questions that travel nurses and allied health professionals frequently ask regarding various aspects of travel taxes.
How Long Can You Work in the Same Place?
We get various versions of this question every tax season. Travelers often get conflicting information about how long they can work in the same location without losing their tax-free stipends or risk owing taxes on untaxed stipends they weren’t qualified to receive.
Benson explained, “Generally, for housing and meal stipends to be considered tax-free, the expenses must be incurred while you are away from your tax home for work. You are only considered away from home if you must sleep or rest somewhere other than your home. So, a traveling nurse who has temporary housing for an assignment would be considered away from home. Whereas one who can commute from their current home may not be considered away from home.”
“Additionally, the work assignment must also be temporary, which generally means that you expect the assignment to last less than 12 months. If you realistically expect to work in a location for more than one year, the assignment is typically not temporary, and those stipends may be considered taxable income. You should look at all the facts and circumstances of your situation before making a decision either way.”
Stipends Are Tied to Your Permanent Tax Home
“An important factor for the above points is where your tax home is,” continued Benson. “You may think your tax home is your permanent home, but that may not always be the case. There is no bright-line rule for determining one’s tax home or when it changes. Instead, the IRS uses a factor test to determine a person’s tax home. It is generally the place where their main place of business or work is located.”
If you don’t have a regular place of business, the following factors determine your tax home:
- You perform part of your business where you keep your main home and use that home for lodging when you do business in this area.
- You have living expenses that you duplicate between your main home and another residence because your business requires you to be away from home.
- You haven’t abandoned the area where your historical place of lodging and claimed main home is located, a family member lives at your main home, or you often use the home for lodging.
“If you meet all three factors, then your tax home is where you regularly live and work,” Benson said. “Only two factors satisfied means you may have a tax home depending on your circumstances. If you only meet one factor, you may be itinerant or have no tax home.”
“A traveling nurse who has met the last two requirements could meet those requirements by duplicating living expenses and having a family living at their home. Their tax home would be their main home and not where they are staying while on assignment.”
To tie all this together, Benson provided an example of a traveler working on-site for 10 months at a location 4 hours from their apartment.
“Under these facts, you would likely be considered away from home since you are staying on-site four hours from your apartment. Your assignment is likely temporary because it is only 10 months. Finally, your tax home hasn’t changed from your apartment because you have duplicate living expenses, and you kept your apartment where you historically live. Thus, your stipends would likely remain tax-free.”
RELATED: How Travel Nurse Housing Stipends Work
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But What About Resetting the 12-Month Clock?
A secondary question often tied to the tax home theme is if you can reset this 12-month clock. Many travelers hear that if they work 12 months for an employer and then take 30 days off, they’ve reset the clock and can now work another 12 months at the same hospital or in the same city. According to Benson, if you knew you would return to the same hospital or location, you’re not resetting the clock.
“Whether the stipend will still be tax-free depends on the expectation the healthcare provider has when they take on the work assignment and whether that expectation changes,” said Benson. “For example, if the healthcare worker signs a contract for 12 months and they have no expectation that the contract will be extended, the stipend will be tax-free. If they have a reasonable expectation that the work assignment will last longer than 12 months, the stipend may be taxable as of the date the expectation changed.”
Here’s a breakdown of an example from Benson:
- A traveling nurse signs a 12-month contract to work in Kansas City, Missouri, when they usually work and live in Memphis, Tennessee.
- The stipend will be tax-free if they have no reason to expect the contract to be extended beyond the 12-month period and their tax home hasn’t changed.
- If after the contract ends, the nurse takes some time off and later gets the contract extended, their tax home may change depending on all the facts. If there was no expectation that the contract would be extended, their tax home would likely not change.
- If, on the other hand, the nurse expected and hoped the contract would be extended, their tax home may change, making their stipend taxable.
“Another factor to look at is how many times this extension happens,” added Benson. “One time may not necessarily change things, but repeatedly doing so would make a difference . . . The main point here is there isn’t a bright-line test. You must look at all the facts and circumstances to determine if the taxability of the stipend changes.”
How Does the 12 Out of 24 Months “Rule” Relate?
Travel nurses and other HCPs often hear about a “12 Out of 24 Months Rule” that basically says you can’t work in the same area for more than 12 months in any rolling 24-month period. In other words, if you work a year at one hospital, take a month off and then work another year, you’ve exceeded 12 out of 24 months at the same location.
While this is a good rule of thumb that many in the travel healthcare industry follow, Benson emphasized that this isn’t technically an IRS rule.
“As mentioned earlier, there is no bright-line rule for when a tax home changes to a new work assignment area,” she said. “If you spend more than 12 months in one area for work, your tax home may shift to that new location and expenses are no longer considered ‘away from home’ nor temporary.”
“However, your tax home can shift even if you don’t work 12 months in an area, depending on your circumstances. For example, if you sell your main home and no longer have other ties to your tax home. If you spend 12 months in one location and only 4 weeks in your ‘home,’ your tax home may shift to your new location.”
“The IRS says your tax home is the entire city or general area where your main place of work is located regardless of where your home is located. You must take into consideration the amount of time you spend in each location for business purposes, the degree of business activity in each area and the significance of financial return in each area. The length of time you spend in each is the most important consideration.”
Based on an example in which a traveling nurse spent 12 months in one location and returned home for only 4 weeks before returning to the same location for another 12 months, Benson said it would lean toward the work location being your tax home and not the area where your family is located. She cautioned that spending that much time in one location tends to look like you’re no longer a temporary worker but rather a permanent one and disqualified from taking tax-free compensation for expenses.
Will Breaking the 12 Out of 24 Rule Cause Travel Nurses to Owe Back Taxes?
As Benson already pointed out, the 12 out of 24 rule doesn’t officially exist. Instead, you must look at expectations to determine whether you might end up with a tax issue.
“What’s most important is the expectation of the traveler when the stipend is received,” Benson explained. “If they reasonably expect and the assignment actually lasts less than 12 months, the stipend could be tax-free. If they find out the assignment will last more than 12 months, it may be considered indefinite, and stipends received after the expectation changes would be taxable.”
“So, if they reasonably expect the assignment to last less than 12 months but find out in month 5 that they will be extending the contract to 15 months, they will no longer receive tax-free treatment after month 5 (when the expectation changed). If the stipends should be included in taxable income because circumstances change and a traveler chooses not to include them, they will likely face penalties and interest for not properly reporting their income.”
What About Returning 3 Years Consecutively?
As Benson described above, the IRS looks at how long a traveler spends in each location regardless of how long they spend in an area within a 24-month period or whether they return three years in a row. She explained that if a person spends nearly all of their time in their new work location, their tax home for tax purposes will likely shift to the new location regardless of where they maintain a permanent tax home.
“Employees who lack travel status may find their stipends taxable if their assignment is indefinite, i.e., expected to last or actually lasts more than one year. At the time of payment—if the employee reasonably expects they will return to the same area three years in a row, it’s no longer considered a temporary assignment and stipends may be taxable.”
Is There Such a Thing as a 50-Mile Rule?
Many travel nurses and allied health workers hear that they automatically qualify for tax-free stipends if the assignment is at least 50 miles from their home. Like other “rules” often touted as stemming from the IRS, the “50-Mile Rule” is another rule within the travel healthcare industry not directly tied to an IRS tax rule.
Workers in other industries commute this distance to work daily, so it’s possible a traveling nurse could commute 50 miles to and from work. However, that doesn’t mean they wouldn’t qualify for tax-free stipends at this distance, especially considering how taxing nursing is and the lengthy shifts they typically work.
“There is no 50-mile rule for receiving tax-free stipends,” said Benson. “Instead, the requirement is that the distance you travel for work must be farther than a reasonable commute and requires rest or sleep before going back to your tax home. This amount of time is not definitive; it requires that an employee be away from their tax home for longer than an ordinary day’s work and sleep or rest is required to meet the demands of their work. The facts and circumstances of each taxpayer’s situation can affect whether the ‘overnight’ rule is met. “
What Are the Minimum Requirements to Maintain a Permanent Tax Home?
Since tax-free stipends are tied to whether a traveler properly maintains a permanent tax home, we covered the basics to fulfill this requirement. Many travel nurses work away from their permanent residence most of the year and only return home for a few weeks here and there. They may keep a per diem nursing job and grab a shift or two while at home, but does this suffice if they earn most of their income and spend most of their time elsewhere?
“Again, no bright-line rules exist for these types of situations,” Benson said. “Generally, the tax home is the entire city or metropolitan area where the main place of business is located. For example, travel to the same state, but different cities may not shift a tax home to the new work area if they’re working in different cities/metropolitan areas.”
She pointed out that the factors for determining a tax home are:
- Length of time normally spent in each location for business purposes
- Degree of business activity in each area
- Relative significance of financial return in each area
However, Benson said the length of time is the most important factor. Review the section on how Stipends Are Tied to Your Permanent Tax Home to understand the factors determining your tax home since you don’t have a regular place of business.
What’s the Best Way for Travelers to Show They Duplicate Expenses?
“One of the factors to determine a tax home if you don’t have a regular place of business is that you must have living expenses at your main home that you duplicate because your business requires you to be away from home,” explained Benson. “Taxpayers do not have to prove they have duplicate living expenses at their home and place of work—it’s only important in determining whether they are ‘away from home’ for the purpose of their employer’s accountable plan (i.e., whether they qualify for a stipend) purposes.”
In other words, you don’t have to prove you have duplicated expenses when filing taxes, but you may have to provide proof to your employer. Your employer may require you to substantiate your expenses by submitting a detailed expense report under a tax-free accountable plan. If you don’t meet the rules, your stipend could be taxable. In some cases, you may also need these records for the IRS.
“It’s important to note that excess stipends may need to be returned to the employer or can be taxable wages. For example, if your employer pays a stipend for rent and you only use part of the stipend for rent, the remainder may need to be returned or may be considered taxable income. The employer may require substantiation of your rent payments.”
“It’s always a good idea to keep records of things like utilities paid, rental or mortgage payments, maintenance expenses, etc., just in case an issue arises in the future. You don’t have to submit these to the IRS, but having them will ensure you can show you have duplicate expenses if you are audited.”
Are Travel Nurses Audited More Frequently?
The unique way travelers are paid may make some worry about being audited. While some tax professionals don’t feel travel nurses are audited any more than other people, their tax returns may be looked at more closely.
Benson explained, “If a reimbursement/stipend plan appears to be recharacterized wages, the IRS may scrutinize returns of travel nurses who are paid significantly less in wages and reimbursed for travel expenses. They may also scrutinize the plan itself through the employer. Abusive schemes may be more susceptible to audits.”
“At H&R Block, we offer a service called Peace of Mind, which protects you for the life of your return. This means if you receive a letter from the IRS based on your return filed with H&R Block and with Peace of Mind, we will handle it.”
How Does It Work If Travel Nurses Don’t Take Tax-Free Stipends?
Travel nurses and allied health professionals with a permanent tax home who aren’t taking tax-free stipends often wonder if they’re limited to the length of time they can spend in the same location. Benson reassured us that if a person only receives taxable W-2 wages for their travel nursing jobs or other healthcare positions, their tax home is irrelevant for tax purposes.
Can a Travel Nurse Claim Expenses on Their Taxes?
Claiming uncompensated expenses is temporarily a thing of the past.
“Unreimbursed employee expenses aren’t allowed under the Tax Cuts and Jobs Act (TCJA) between 2018 and 2025. Employees receiving a stipend under an accountable plan through their employer (as described above) cannot deduct expenses that were reimbursed to them through stipends. Accountable plans can reimburse the employee for travel expenses, including airfare, lodging, mileage, laundry, and meal expenses. If the TCJA rule isn’t extended, employee unreimbursed expenses may again be deductible after 2025.”
Are Travel Nurses/HCPs Being Double-Taxed?
Many travel nurses and healthcare providers are concerned because they’re paying state income taxes where they permanently live and in every state where they work throughout the year (unless one of these states doesn’t collect state income taxes). Thus, the question of whether they’re being double-taxed comes up frequently.
“If the nurse resides in a state that imposes individual income taxes, they will owe federal and state taxes on their wages,” said Benson. “Whether they will owe taxes in the state they are working in depends on the state residency rules for the work assignment state.”
“For example, some states will require individuals who live or work in the state for more than 180 days to file a return with that state as either a part-year or regular resident of the state. Depending on the states involved, the traveling nurse may qualify for a credit for taxes paid to the work state on their home state return. These credits are typically designed to make sure you aren’t paying more in tax than your home state’s tax rate.”
How Should You Handle Conflicting Information?
This question has been popping up more frequently, likely due to the unique aspects of travel healthcare workers’ taxes. If you receive information from your recruiter that conflicts with what a tax professional has told you, we recommend listening to the tax expert to avoid potential tax woes.
However, sometimes, HCPs receive conflicting information from two tax professionals. Tax professionals unfamiliar with the atypical tax issues that plague travel nurses and allied health professionals may inadvertently provide incorrect information. For example, we’ve heard from HCPs who were told by one tax expert that they qualified for tax-free stipends but then were told by another that they didn’t qualify.
If you’re unsure who’s providing the correct information, err on the side that should cause you the least worry regarding owing the IRS a bunch of money. Benson says H&R Block can help alleviate some of this worry.
“H&R Block tax pros can assist with determining a tax home and help with issues with any stipends or payments under an accountable plan,” she said. “Since everyone’s circumstances vary, the determination of whether a tax home is in City A or City B will change depending on the person’s unique situation.”
As she previously pointed out, clients who file with H&R Block using its Peace of Mind program are protected for the life of their return. They will handle any letter from the IRS based on the return H&R Block filed for them.
Are There Any New Tax Rules Impacting Travel Nurses?
Each tax season, potential changes in tax rules occur that could impact travel healthcare providers. We asked Benson about any changes that might impact HCPs for the 2023 tax year.
“As with any profession, it’s wise to ensure that your W-4 is up to date to reflect the proper withholdings for your tax situation. For example, you may want to withhold extra from wages to cover any reimbursement/stipend that is actually taxable. Since the tax brackets shifted, taxpayers may see a change in the amount of tax they pay.”
“Changes were also made to retirement plans and distributions under the Inflation Reduction Act; traveling nurses may want to ensure they’re covered if those rules impact them. It’s always a good idea to talk to a tax professional to ensure you’re taking advantage of every benefit available to you. This is especially the case when a taxpayer’s situation changes.”
Need help filing your tax return and maximizing your refund? Consider a provider at H&R Block. They’re currently running two specials: 15% off DIY services or 20% off H&R block software.
If there are questions you’d like answered in future updates, leave them in the comments below.
Tax Disclaimer: The information contained herein is general in nature and based on tax laws that are subject to change. Although many details came from a tax professional, the writer isn’t a tax expert and can’t guarantee the accuracy or completeness of any information contained in this post. This publication doesn’t and isn’t intended to provide tax, legal or accounting advice. Readers should always consult their personal tax advisors concerning the application of current and new tax laws pertaining to their specific situations.
Editor’s Note: This blog post was originally published in January 2022 and has been updated annually to reflect current tax information provided by tax professionals.
Disclosure: If you click on the included links, we may receive compensation.
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This may have been asked before. I have been on a travel assignment for six months in PA. If I take an additional assignment for three months in VA and move my tax home permanently back to PA (as a staff employee);when it comes to tax time will my previous tax free stipends have to be repaid?
Hello Julie and thanks for reaching out! As long as you can prove that you had two homes (a permanent tax home not in PA and a temporary home in PA) and duplicated expenses throughout the temporary assignment, you should be fine. However, we always advise travelers to seek the advice of a professional tax advisor familiar with tax rules for traveling healthcare professionals to ensure they cover all their bases and aren’t hit with a surprise tax bill.
Hello! So I realize this is a variation of the same question asked, but… My wife and I are travel nurses. We were at a hospital in Reno Nevada for almost a year, she was just under the year mark and I think I was at 10 months. She started in Feb and I in April. We both ended around middle of Feb the following year. We started a new assignment in San Diego in March and will be here until the beginning of December. We have plans to go home for the holidays and would like to go back to Reno in January for a few months of ski season and work. While this isn’t in compliance with the 12 in 24 rule of thumb, if we only stayed for a 13 week contract and then went elsewhere, would we be okay? Thanks in advance for any help you can lend.
Hello CJ and thanks for reaching out! The 12 out of 24 month rule is a general rule of thumb that those in the travel healthcare industry use to help ensure their tax home doesn’t change. Although it isn’t an actual IRS rule, it can be helpful. Because you’re spending a considerable amount of time in another location, then spending time at home, before returning to the original location, you could be okay, especially if you only spend a short time there before moving to another location or back home. However, we strongly suggest speaking to a tax professional familiar with traveling HCP tax rules to ensure you don’t inadvertently shift your tax home. The tax pro we spoke to cautions travelers about spending too much time in the same location, causing it to seem more permanent than temporary.
I just took a travel assignment in the same state after l moved from my original tax home due to personal reasons. My original home and the assignment was 49 miles apart; however, my new location is 129 miles from the travel assignment. If for any reason l decide to return home after issue is resolved before the tax year, will l be subject to any scrutiny from IRS because l might use my original address for taxes. I’m asking this because my current issue might be temporary and its resolution means l will have to return home.
Hello David and thanks for reaching out! There is no 50-mile rule for receiving tax-free stipends, so your previous home may qualify if it meets all the IRS rules regarding permanent tax homes and working away from this home. However, everyone’s situation is different, so we always advise that you speak with a tax professional familiar with current tax rules for travelers to ensure you meet all qualifications. To cover your bases, it’s a good idea to keep all records regarding your permanent tax home to prove you duplicated expenses between your permanent and temporary homes, wherever those were during the assignment.
Great article. Can you tell me if there is any difference in govt contracts that last longer than a year ? Do i still have to take “30” days off if i am in consecutive year long contract at a govt facility ?
Thanks Anngela. We’re glad you enjoyed it! Typically, travel nursing rules are the same no matter what type of facility you contract with. However, we always recommend talking to a tax professional familiar with current travel nursing tax rules to ensure you follow the most recent IRS tax regulations. Also, keep in mind that the tax expert we spoke to said taking 30 days off doesn’t reset the clock if you know you will be returning to the same facility and/or location.
Hi! Does a rental vehicle count as incidentals for the tax free stipend?
Hello Amanda and thanks for reaching out. Car rentals are typically included as an incidental expense for travel nurses, especially if you flew to the travel assignment. However, you should always check with your staffing agency to confirm which expenses fall under your stipend.
I just started looking into the way that stipends are taxed after someone from an agency stated that the stipends are strictly used for a hotel or food and receipts must be kept in case you’re audited. Is this true? The wages for agency are so low that if this is true then why would anyone want to break the law just to receive higher pay due to the stipends? Why would anyone want to get paid less by $10-$20 per hour less to travel away from their family? Make this make sense please.
Hello Lorelei and thanks for reaching out! Your tax-free stipends are for housing, meals and incidental expenses (such as travel costs). Stipends aren’t reported as taxable income because they’re intended to be used for duplicated living expenses. You should keep receipts to prove you’re duplicating expenses and qualify for tax-free stipends, but you don’t need to use all your stipends strictly on housing and food. Stipends are meant to cover any reasonable expense you might have while away from home. We encourage you to speak to a tax professional who is knowledgeable about tax rules for travelers and has the current and correct information. Anyone besides a tax professional may give you incorrect information.
I worked at a travel job for 12 months. After a 9-10 month hiatus they’ve asked me to go back. I also worked at my primary location throughout my contract doing PRN making more money at the end of the year “taxable”. During my hiatus I still worked full time during those 9-10 months. So technically I’ve made more money at home before tax-free revenue. If I go back will I have issues with the IRS accepting the stipends and per diem again?
Hello Charles and thanks for reaching out! This is a tough question to answer. On the one hand, a good rule of thumb in the travel healthcare industry is the “12 Out of 24 Months Rule,” which basically says you can’t work in the same area for more than 12 months in any rolling 24-month period. But the tax expert we spoke to said this isn’t technically an IRS rule. People in the industry often follow it to help ensure permanent tax homes don’t change and travelers continue to qualify for tax-free stipends. However, you could follow this “rule,” and your tax home could still change and/or you could no longer qualify for stipends. For example, if you knew beforehand you would spend more than 12 months in the same area. IRS tax rules are extremely complicated for travelers, so we always recommend talking to a tax professional familiar with these rules before making any decision that could impact your tax bill. While it sounds like you’re checking the right boxes by earning more in your permanent tax home area, everyone’s situation is unique. We encourage you to speak to an expert who can thoroughly evaluate your situation.
My tax home is in Mississippi, let’s say I worked a travel contract in Los Angeles, CA for 50 weeks, will I be able to take a travel contract in San Francisco, CA 3 weeks later without shifting my tax home to CA?
Hello and thanks for reaching out! One thing to keep in mind when working in the same state for extended periods is that you not only have to consider federal tax rules regarding permanent tax homes but also whether you must file state income taxes in the work state as a part-time resident. Most states consider you a resident for tax purposes if you work 183 days or more there in a year. We strongly suggest discussing your situation with a tax professional familiar with the unique tax rules of travel healthcare professionals to ensure you follow current IRS tax rules and the tax rules for your home state and work state.
Great article. I have a question. I accepted a travel contract that is over 1000 miles from my home. I have extended the contract twice (been in the area for 9 months) with a tax-free stipend. I am looking at a different contract with a different hospital that offers a taxable stipend. The new contract will put me over 2 weeks for the 12-month rule for being in one metropolitan area. I have an option to work at a hospital in the area where I am now or one that is in a different State for the new contract, but the different State and city is only 30 minutes away. It wouldn’t be an issue to relocate to a new place for the 13 weeks. Would the new State and New hospital count as a new metropolitan area? Thank you.
Hello Robin and thanks for reaching out! We’re glad you liked the article. Regarding your question, it depends on the metro area. There are several multistate metro areas where a metro includes cities in more than one state (these are usually on the border). This Census map might help: https://www.census.gov/geographies/reference-maps/2020/demo/state-maps.html. If you take a contact without tax-free stipends, you could still impact your permanent tax-home status if you remain in the same area. Our best advice is to speak to a tax professional familiar with the unique tax rules for travel healthcare providers to explore your options and any impact your choice might have on your taxes and your permanent tax home. We wish you the best of luck and hope Vivian can help with any further travel job needs or questions.
Hello – my daughter is a travel nurse in California since 10/2022…she worked for 1 hospital for 3 months, then moved to another hospital with the same agency but before the 1 year was up – changed agencies because the hospital she’s working for was no longer dealing with the that agency. Since it was a new agency the hospital offered her another contract – which now has put her in California 7 months over the 12 months. Throughout this time she has come home several times, taken 4-6 weeks off in between contracts. She has been getting the tax free stipend. She is finishing up her last contract now, May she will be leaving California.
She had her taxes done by a professional, has paid taxes to California and our home state Connecticut. She was due a refund from the state of California.
But she just received a letter from California requesting a copy of her drivers license, W-2 forms, & 1099 federal form.
She was never issued a 1099 form from either agency. What is she supposed to do? What are they looking for?
Hello Lilliana and thanks for reaching out! We recommend contacting the tax professional who filed her taxes to see if they know what California wants. They should be able to help her sort it all out. However, it may go beyond the extent of their service. If so, she may want to consider finding a tax professional who covers the full range of services, from filing to audit representation, to ensure she’s completely covered. Travel taxes are complicated, so you want the tax pro you choose to have the experience and qualifications to complete her taxes correctly.
As a Respiratory Therapist, do you have to take 30 days off each year after you have worked 12 months in one state? I live in MO work in MO, work at a hospital for 12 months then I take 30 days off for tax reasons. Do I have to do this for the state of MO or can I just switch hospitals.
Hi Tyson and thanks for reaching out! If you’re a travel healthcare professional and you receive tax-free stipends in your travel contract, based on what we’ve been told by tax pros, working 12 months out of 24 months is the general rule for working in the same city/area. These 12 months count even if you’re not working consecutively there, meaning if you work in one city for 12 months, take off for 1 month, then work in the same city for another 6 months, you’ve gone over the 12 out of 24 rule, and you technically don’t qualify for tax-free stipends because it’s no longer considered a temporary work assignment. However, we always suggest talking with a tax professional familiar with tax rules for travel HCPs to ensure you’re following current IRS tax rules and ensure you don’t end up with any surprise tax bills.
If wanting to go full time and permanently move to the city & facility you have been a traveler at for just short of a year, is this doable? Don’t know how this works with the IRS (stipends) from the travel contract?
Hello Kim and thanks for reaching out! Many travelers later decide to join a facility on staff after spending time there on a temporary contract, so it’s definitely doable. As long as you can provide proof that you duplicated expenses during the entire time you were a traveler with this facility, you should be fine regarding untaxed stipends. However, to ensure you’ve covered all your bases and are following current IRS tax rules for traveling healthcare professionals, we always suggest that you consult with a tax professional familiar with travel HCP taxes.
I’ve been traveling for almost two years now and have been paying my Mom rent and covering internet bills at my tax home. In the case I get audited by IRS, how do I show proof? I’ve been paying my Mom rent through zelle.
Hello Henry and thanks for reaching out! Be sure to keep all your receipts for the rent you’ve been paying, which you can use as proof of payment. To cover all your bases, you Mom should also be claiming these rent payments on her tax return as income. To ensure you’re following current IRS rules, we always suggest speaking with a tax professional familiar with travel healthcare jobs.
Hello-i have a question-i am starting a contract that is 100+ miles from my home. Am I allowed to stay at a hotel for those 3 days I work and then come home on my off days to meet the rules of the tax free stipend or do I need to pay for the whole week?
Hello Pam and thanks for reaching out! To qualify for tax-free stipends, you must duplicate expenses at your permanent tax home and your temporary residence while on assignment. Thus, you typically must secure housing for the entire contract, not just the days you work. Travel nurse agencies have a reasonable expectation that the travel nurse incurs housing expenses every day they’re on an assignment, so they pay housing stipends every day of the week, not just scheduled workdays. You could run into a tax issue if you’re not incurring housing expenses every day. However, we’re not tax experts, so we always advise discussing your unique situation with a tax professional familiar with travel nurse tax rules to ensure you follow current IRS regulations. You can find more details on travel nurse housing stipends here: https://www.vivian.com/community/travel-nursing/how-travel-nurse-housing-stipends-work/. We wish you the best of luck with your upcoming travel contract!
I have been traveling for about three years now. I live with my parents but always seek housing near my assignment locations. My monthly budget has ranged from $900 to $1400. While I don’t pay rent at my parents’ home, I do cover various small bills from time to time. Due to my lack of familiarity with this, I am receiving tax free stipend. I even consulted a tax advisor who said I was okay with my tax-free stipend. Instead of being scared, I decided to save up to 22% of both my taxed hourly income and stipend from each paycheck. Do you think that’s enough, and do you believe requesting a tax declaration adjustment to pay taxes on my stipend could raise a red flag, potentially leading to an automatic audit?
Hello and thanks for reaching out! To qualify for tax-free stipends, you must duplicate expenses at your permanent tax home and your temporary residence. Read more about tax homes for travelers here: https://www.vivian.com/community/travel-nursing/what-is-a-travel-nursing-tax-home/. You’re technically not duplicating expenses if you’re not regularly paying housing costs at your permanent tax home (your parent’s house). Since Vivian doesn’t employ a tax professional, we can’t advise you on whether the 22% would be enough to cover any additional taxes you might owe or if a tax declaration adjustment would automatically lead to an audit. We suggest consulting with a tax professional with proven experience specifically for filing taxes for travel healthcare professionals to ensure they know and understand the current IRS tax rules regarding tax-free stipends to ensure you’re prepared for the upcoming tax season.
Hello, I started a contract in January and have continued to extend. I am reaching my year mark, but have taken off a few weeks in between extensions and more significantly a 7 week break where I was out of the area before returning for my extension. I know of the 12 month in any 24 month rolling period rule, my question is whether I can extend an extra 6 weeks past my “year” mark and still claim tax free stipends since I took that consecutive break off. (I started first week of January 2023 and am currently extended until first week of January 2024, I took off Memorial day week through beginning of July off, can I extend another 6 weeks past January and still claim tax free stipends and be in the 12/24 rule?)
Hello Claire and thanks for reaching out! We suggest speaking to a tax professional familiar with travel healthcare provider regulations and current IRS tax rules to ensure you follow the most up-to-date information. Although you can work 12 months total in a rolling 24-month period, we’ve previously been told that taking breaks while working consecutively in the same area doesn’t start the clock over. Taking time off but not working in a different location during that period muddies the water. Your best bet is to ask your regular accountant if you have one or a local tax professional if you don’t before you make a decision.
Hello… if I took a 6 month assignment, took a 1 month break, and then worked a 6 month assignment, would that be breaking the 12 month within 24 rule?
Does your time off still in a contract count towards working months?
Thanks!
Hello Summer and thanks for reaching out! Technically you’re only working 12 months total in your scenario. However, you wouldn’t be able to take another month off and work another 6 months, which would put you over the 12 out of 24. One thing is unclear though. Are you working two separate 6-month contracts or one 13-month contract with a vacation factored into the contract. If the contract is actually for 13 months, then you would likely have an issue. We always suggest talking to a tax professional familiar with travel healthcare jobs to ensure you’re following the most current IRS rules.
After reading your article regarding tax laws for travel nurses…if the 30-days off doesn’t reset the calendar for working in the same location why do so many agencies encourage, mandate the break and then offer you “extensions” in the same area?
This seems like the Agency is profiting from the facilities since extension don’t require the expenditures of paying for a new travel nurse to fill the spot – orientation, credentialing etc
Hello Denise and thanks for reaching out! This blog post was written with the help of tax professionals familiar with the tax laws that travel healthcare professionals must follow. We can’t comment on why an agency does things the way they do, but we always encourage travelers to seek the advice of a tax expert to ensure they’re following the most recent IRS rules and avoid any surprises on their tax returns.
Hello, if traveling to a hospital and staying for over a year but taking 30days off before hitting that year mark under the tax law you would need to take a year off not just 30 days correct to go back to the hospital?
Hello Katy and thanks for reaching out! Vivian doesn’t employ a tax expert, but according to the tax professionals we’ve spoken to in the past, you mustn’t work more than 12 months in any rolling 24-month period. Unfortunately, there isn’t a page on the IRS website I can send you to get more information on this. The tax pros said this was the interpretation based on previous tax court cases. Staying in one place doesn’t just mean the hospital. It also means the city and general area where the hospital is located. We hope this information is helpful, but we also suggest you speak to a local tax professional familiar with the unique rules for travel healthcare professionals to ensure you follow current IRS rules.
Hi,
I work in staffing at a hospital and staff both internal and external (agency) travelers, are there differences in how these non-taxed stipends work for these agency RN vs employed RN? Internally, we offer a non-taxed stipend to our employed Travelers who live “50+ miles” from their work site. Before reaching the 1 year mark we stop offering this stipend and reimburse through a taxed bonus in lieu of. However, they are then eligible again to receive a non taxed stipend with their next assignment. Our internal Travelers typically live in the same state as their taxed home and work continuously year after year (3-month at a time assignments) and we just ensure they receive other compensation before that 1 year mark and then back to stipend. No breaks or gaps are needed in employment just the stipend halted for 3 months and then back.
Hello Heather and thanks for reaching out. Travel nurses must follow IRS guidelines to avoid being taxed on untaxed stipends. Vivian doesn’t employ a tax expert full-time, but we’ve spoken to a few for this post and to explore various tax questions. In a nutshell, travel nurses can’t stay in one area for longer than 12 months, even if they take time off or they lose their untaxed stipends. Per the IRS, anything longer than a year is considered an indefinite assignment and they don’t qualify for untaxed stipends. Some tax advisors also stipulate that travelers can’t work in the same city for more than 12 months in any rolling 24-month period, even if they don’t work consecutively. Travelers also must duplicate housing expenses between their permanent tax home and a separate/temporary home they take while on assignment to qualify for untaxed stipends. We hope this helps answer your question, but we also suggest talking with a local tax professional familiar with the unique tax issues for travel RNs who can help explain it more precisely.
I am looking at taking an internal travel contract with a facility that is 14 hrs away from my tax home. I plan on renting a family member’s house in that location for fair market value while I still maintain my tax home (duplicating expenses). I reached out to the facility offering the internal travel contract and they say that the pay rate is fully taxed, they will not pay a stipend to workers from other states. Is there a way I can deduct my expenses in lodging and meals/incidentals as per GSA website while I’m up there myself to lessen my tax burden when I file my taxes? How would I do this?
Hello Crystal and thanks for reaching out. Vivian Health doesn’t employ a tax professional, so our first recommendation is always to speak to a tax expert with experience in travel healthcare taxes to ensure you’re claiming everything allowable under the current tax code and not claiming anything that might result in a surprise tax bill. We can also suggest looking up the tax reform enacted in December 2017, commonly called the Tax Cuts and Jobs Act. It suspended job-related expenses and other miscellaneous itemized deductions that exceeded 2% of your adjusted gross income from 2018 through 2025. While this reform remains in effect, unreimbursed job expenses, which include work-related expenses an employee pays out of their own pocket, aren’t deductible. IRS Publication 5307 (https://www.irs.gov/pub/irs-pdf/p5307.pdf) provides details on the reform. It’s essential that you confirm what you can and can’t claim as deductions on your personal income taxes as a traveler to ensure your tax burden isn’t higher than expected when you file.
I am a last minute tax filet and noticed on my w2 my agency I culled my stipends in with my salary so it appears that I made more specially since the stipends were tax free in Cali for $2233 a week! Where am I able to claim my expenses for housing, food, and rental cara
Hello Mondolyn and thanks for reaching out! If your agency added your tax-free stipends to your salary, it would be beneficial to ask for a corrected W2. This may mean you’ll need to file for an extension to file your taxes unless the agency can get the correction for you quickly. Claiming these expenses as deductions on your taxes became tricky since the Tax Cuts and Jobs Act was enacted in December 2017. It suspended job-related expenses and other miscellaneous itemized deductions that exceeded 2% of your adjusted gross income from 2018 through 2025. While this reform remains in effect, unreimbursed job expenses aren’t deductible, so it’s important to ensure your employer properly accounts for all expenses. However, Vivian Health doesn’t employ a tax professional, so we always recommend speaking to a tax expert with experience in travel healthcare taxes to ensure you’re filing everything correctly and receiving all the deductions you deserve.
My daughter is a new traveler. Her tax home is with me. She “rents” a room from me. I have 4 BRs so she pays 25% of my expenses including interest, taxes, insurance, and utilities. Do I need to file Schedule E showing these payments even though the net income for me is zero? We are technically sharing expenses. We have heard that I will not need to declare this income but I’m unsure. we want to do the right thing.
Hi Nancy and thanks for reaching out! If your daughter receives tax-free stipends, you’ll need to declare the income to ensure she checks all the boxes to qualify for them. One of the criteria is to be able to prove she duplicates expenses. Receipts help, but to ensure these receipts are legitimate when renting from friends or relatives, they must be included on the appropriate tax documents. However, we always suggest talking to a tax professional to ensure everything is filed correctly and you don’t overpay. If the net income is zero, I’m sure a tax pro can find a way to offset the declared income while still showing you received it for the proof your daughter needs.
Hi, I have a question concerning deductions on tax preparations. I’m a W2 travel nurse employee and I receive weekly un-taxed stipends through my agency. I am in the process of filing my taxes- and I’ve been told conflicting information. One accountant reported that I cannot use my traveling expenses related to work such as: flights, car rentals, scrubs, state RN licensure fees as a tax deduction because they were already paid for through my un-taxable weekly stipends I’ve received. The second accountant I’m working with reported that I am able to write off these traveling related expenses as deductions on my tax returns even though I receive the weekly stipends. So I am very conflicted. I have receipts for all of my traveling expenses related to work. I have a perm home in New York and I’m currently working on west coast.
Hello Ari and thanks for reaching out! Your untaxed stipends may reimburse you for your travel expenses or your agency may pay a separate reimbursement for them. We suggest talking to your recruiter to confirm exactly which expenses you receive reimbursement for and whether you need to supply receipts to the agency for reimbursements. However, even if your travel expenses aren’t covered, it’s doubtful that you can use them as deductions on your taxes due to major tax reform enacted in December 2017, commonly called the Tax Cuts and Jobs Act. It suspended job-related expenses and other miscellaneous itemized deductions that exceeded 2% of your adjusted gross income from 2018 through 2025. While this reform remains in effect, unreimbursed job expenses, which are work-related expenses an employee pays out of their own pocket, aren’t deductible. These expenses include work-related travel, transportation and meal expenses; work-related education; work clothes and uniforms; and tools and supplies used in your work (among other things). Because these aren’t deductible, it’s important to ensure your employer reimburses you for these expenses. IRS Publication 5307 (https://www.irs.gov/pub/irs-pdf/p5307.pdf) provides details on the reform. However, Vivian Health doesn’t employ a tax professional, so we always recommend speaking to a tax expert with experience in travel healthcare taxes. Since you’re already working with two accountants, ask them how this reform impacts your personal deductions as a travel nurse.
Hi! I really appreciate all this info. I have a specific question about the 12 months in a 24 month rolling period rule. Do you know if this trumps the not returning to an area 3 years in a row. I worked in a contract for 1.5 months in 2022, and I plan to return to the same one for 6 months this year (2023), and 5 months next year (2024.) This would make me violate the 3 years in a row rule but I wouldn’t be in violation of the 12 months in 24 rolling period since it would just be 11.5 months. What are you thoughts on this?
Hello Emmy and thanks for reaching out! Some tax experts we’ve spoken to have warned not to return to the same area 3 years in a row because it sets a precedent. Here’s another way to look at it. Even though you’re not working in one place for longer than 12 months in any rolling 24-month period, are you making more income in this one place than you do at your tax home? If you continually earn most of your income in the same place, then your tax home could eventually shift to the place you keep returning to. Once it becomes your tax home, you no qualify for tax-free stipends and you may end up owing taxes. However, we always advise you to speak with a tax professional familiar with the unique rules of travel nursing. Most IRS rules for travelers aren’t clearly defined, so tax professionals often rely on previous IRS court cases for guidance. They also keep track of any changes in the current tax code, so it’s critical that you seek their opinion before potentially doing something that could lead to an unexpected and potentially expensive tax bill.
Great article! Very helpful!! Question about passing one year… how do they determine if you knew you were going to stay more than a year? If signing 13 week contracts, then a month off at the year mark, then back to same job- what kinds of things would they accept as proof of it not being planned in order for it to not become your tax home? Are personal reason a possibility?.. such as maybe not being able to find another job, or requiring medical services for a few months in the area of the job that are not available anywhere else count?
Who gets to decide what counts? Thank you!
Hello Elizabeth and thanks for reaching out. Because travel taxes are extremely complicated, we always suggest speaking to a tax professional familiar with current travel tax rules to ensure you don’t get a surprise tax bill. As Benson explained in our 2024 update, one extension may not change your situation, but multiple extensions in the same place could make a difference. Working a year, taking a month off, then returning again could raise a red flag that you “expected or hoped for” an extension, which could also impact your situation. Ultimately, the IRS makes tax-related decisions, so it’s important for a tax expert to guide you based on their knowledge of similar situations.
Hi there! Great article.
My question is are there any minimum requirements of income at your tax home? Like if I went home to my tax home and worked to maintain my tax home in this regard.
Is there a certain amount of time, or money, or percent of income that is clearly defined to suffice? In addition to renting a room from my family for fair market value.
Thanks!!
Thanks Caleb! We’re glad you enjoyed the article. According to IRS Publication 463, a travel healthcare professional’s tax home is where they regularly live and they must meet at least two of the following factors to qualify for tax-free stipends:
1. You perform part of your business in the area of your main home and use that home for lodging while doing business in the area.
2. You have living expenses at your main home that you duplicate because your business requires you to be away from that home.
3. You haven’t abandoned the area in which both your historical place of lodging and your claimed main home are located; you have a member or members of your family living at your main home; or you often use that home for lodging.
Regarding time, money or percentage of income, the IRS can be vague and there often aren’t any hard and fast rules. We’ve received some suggestions from tax experts based on court cases or recommendations from IRS attornies that might help. Some tax experts suggest that you spend around 30 days per year at your tax home. These days don’t have to be consecutive. Currently, there aren’t any IRS guidelines on a set amount of money or percentage you must earn in your home area, but some tax professionals suggest earning 25% of your taxable income in the area of your tax home to maintain your home through work. As always, you should consult a tax expert familiar with the unique tax requirements of travelers to ensure you’re following the most current rules. We hope this information helps!
Moira,
Are you able to cite more information regarding the 12 out of 24 month rolling period in a metropolitan area? Where did this information actually come from? I have spoken to multiple senior recruiters who have been in their companies for years and no one has any idea where this actually comes from but comes up as a “general travel IRS rule” on the internet and cannot be seen on any IRS affiliated websites.
Much thanks!
Hello Philip and thanks for reaching out! That information came directly from one of the tax professionals I spoke with. I’ve asked for more detailed information, including a possible place online or in the tax statutes that I can share with our readers. As soon as I have this information, I’ll pass it along and update the post so everyone can access it. I hope to have more to share soon!
If you take a contract in Wi but spend 26wks at one city and then take another 26wk contract 3.5hrs away in a different city but still in Wi does the 12month rule still apply?
Hello Jessica and thanks for reaching out. The generally accepted rule of thumb is never to work more than 12 months in any rolling 24-month period in the same metropolitan area. Recruiters may tell you that you can stay as long as you want in the same state as long as you move to different areas of the state. However, it can get tricky if you work in two cities that aren’t in the same metro area but are close enough to allow a reasonable commute. We wouldn’t consider 3.5 hours a reasonable commute, so the two cities are likely far enough apart that they wouldn’t count as the same “area.” However, you must also take care not to inadvertently become a resident of the state where you’re working and it becomes your tax home. Always ensure you’re spending enough time in your tax home and that you can prove you’re duplicating expenses in both places. Unfortunately, the IRS doesn’t provide clearly defined rules when discussing “area” or the time allowed in a given area, leaving it somewhat open to interpretation. Because we’re not tax experts, Vivian always encourages travelers to speak with a tax professional familiar with current travel nursing rules to ensure they stay in step with IRS tax rules.
Do you have to back pay stipend taxes if you go staff at a contract site? A little context- we originally lived about 40 miles from current hospital where we worked in the area for 5 years prior. Have since moved 100+ miles away but have taken a contract here since September. Would that fall into the longer than 12 months rule and would we then owe back taxes on the tax free stipends we’ve been receiving?
Hello Leslie and thanks for reaching out. Generally, if you can prove you duplicated expenses at your permanent tax home and your temporary assignment home throughout your travel contract, you shouldn’t have to pay back tax-free stipends. However, we always suggest speaking to a tax professional familiar with the unique tax laws of travel healthcare professionals to ensure you don’t end up with a surprise tax bill.
One more question, If I didn’t work a shift because I was sick or the facility had a low census will that affect my Weekly Allowance? My agency deduct from my allowance if I call in sick or got cancelled by the hospital
Hello David, deductions from your weekly allowance should be spelled out very clearly in your travel contract. If you’re unsure, ask your recruiter to explain because it can significantly impact your pay. Agencies lower your pay/allowances when you miss a shift because they don’t get paid if you’re not working. However, there’s a difference between you missing a shift and the hospital canceling a shift. If you miss a shift, your contract probably includes a clause stating how much the agency will deduct from your weekly pay/allowance per hour missed. Some offer paid sick leave, but this would be included in your contract. If the hospital cancels your shift, whether you’re paid in full depends on if your contract includes a guaranteed hours policy. If your contract guarantees 100% of the contracted hours, you should be paid the full amount outlined in your contract. If you don’t have this guarantee, you probably won’t be paid for cancellations by the hospital. Keep in mind that at some hospitals, if they cancel a shift but offer you another one in place of it and you turn it down, then it becomes a missed shift, not a canceled shift, and you’ll probably lose money for that shift.
My agency pays me non-taxable stipend weekly as per the GSA max amount, I was reading if I don’t submit an expense report to my employer I should be taxed on the whole amount, is this accurate?
Hello David and thanks for reaching out! You must complete and sign a declaration of your permanent tax home with your travel nursing agency, then confirm with your agency what kind of documentation they require. You should keep documentation that you maintain a permanent tax home away from your travel home to prove you qualify for tax-free stipends, even if they don’t require it. Other documentation can vary by agency and current IRS tax rules. We always advise that you speak with a tax expert familiar with the unique tax situation of travel healthcare professionals to ensure you’re following all IRS tax rules.
Can you provide a legitimate reference (IRS website, government website, detox) for the 12 months in a 24-month time period rule for tax homes? I’m trying to find the actual information on the IRS website. I’ve seen and heard that if you leave for 30 days and come back your fine, but I also keep hearing this 12-24 rule but I can’t find actual documentation of it, only on other travel nursing websites
Hello Nicole and thanks for reaching out! We received the details on the 12 out of 24 months rule from one of the tax professionals we spoke with directly about travel nursing tax rules. We’ll reach out to see if they can provide the actual statute that covers that particular topic and post an update with this information when it becomes available. Vivian strives to ensure everyone has much information as possible. Stay tuned!
Hi I have decided I’d like to do travel nursing. I retired early so I can only earn a certain amount before they start deducting money from my monthly SS check. My question is does the stipend count towards your earned income limit for the year or is it just the taxable earnings that count. Someone said it doesn’t count against it and someone else said yes it does. Ani information would be helpful. Thank you
Hi Mary and thanks for reaching out! Generally, tax-free stipends for housing, meals and other incidentals aren’t included as taxed income on your W-2. However, to ensure you don’t inadvertently go over the amount allowed for your social security disbursements, we recommend consulting with a tax professional who understands the current tax rules regarding travel healthcare professionals. IRS rules often change, so it’s always best to talk to an expert in the field. You might also ask the nurse staffing agency how they report stipends, as this could potentially differ by agency. We wish you the best of luck in your travel nursing journey and hope Vivian can assist you!
I am considering taking a travel assignment. I am trying to decide whether to take the tax free housing stipend or be fully taxed. My Tax home is in NC and I have paid off my mortgage..so, i don’t have that expense anymore..but i have all the up keep and property taxes on it ..
Hello Tracy and thanks for reaching out! You should qualify because you’re still maintaining a permanent tax home, but we suggest double-checking with a tax professional familiar with tax rules for travel healthcare professionals to ensure you’re following all current IRS rules. Remember, if you rent out your home or earn any kind of revenue on the home while you’re traveling, you must claim that income on your taxes. We wish you the best of luck with your travel career and hope Vivian can be of further assistance!
I have been working as a traveler rad Tech for almost a year. I have ben receiving a tax free per diem amount the whole time. They are having trouble replacing me right away, though they have a replacement about a month later. I don’t want to leave them short, and I know after a year I lose my tax free per diem. But a question was brought up by a co-worker and he said that he heard if you go over the 12 months , not only do you lose the tax free pay going forward, but they actually go back and tax you on the pay that you originally got as tax free for the last year. Seems a bit harsh, but will the IRS do that?
Hello David and thanks for reaching out! The IRS has a rule about working in the same place for more than 12 months in any 24-month period. If you go over this time limit, you lose your tax-free status and it’s possible that you could end up with a tax bill for previous tax-free payments. It’s important that you speak with a tax professional familiar with tax rules for travel healthcare professionals about your potential tax liability before working past the 12-month period.
Hi! I have been at a facility for 1 year. It is about 80 miles away from my home and in the same state where I live. I did tax free stipends for the year and just recently switched to a fully taxed hourly pay with no stipends. Since switching to fully taxed, does this mean the 12 month rule no longer applies to me?
Hello Brianna and thanks for reaching out! Yes, the 12 months out of 24 months rule only applies to tax-free stipends. But you don’t want to jeopardize your previous qualification for tax-free stipends and accidentally end up with an unexpected tax bill. We suggest you speak with a tax professional familiar with tax rules for travel healthcare providers to determine exactly how you should proceed to close the period you claimed these stipends correctly. Once that period has been settled, the 12-month rule would no longer apply to you as a fully-taxed traveler.
Hi, so I live with my parents and just took my first travel assignment. is it ok that my parents house is my tax home for now (I don’t pay them rent so I have no proof of duplicate expenses). I stay with a friend where my travel assignment is located.
Hello Gina and thanks for reaching out! If you’re claiming tax-free stipends, this situation will likely lead to issues when filing your income taxes. You must duplicate expenses to qualify for tax-free stipends to cover housing, meals and other incidentals. If you’re not claiming tax-free stipends and your entire salary is fully taxed, then there are no rules regarding your housing situation and you can do whatever you want. However, if you’re receiving tax-free stipends, Vivian suggests you check with a tax professional familiar with travel nurses’ unique tax situation to ensure you follow current IRS tax rules. Congrats on your first travel assignment!!
What about food stipend? How do we produce proof for ‘duplication’? If there aren’t any, why can’t local travelers get food stipend without housing stipend?
Hello Ashley and thanks for reaching out. Travel nurses/HCPs must qualify for tax-free stipends by keeping a permanent tax home where they duplicate living expenses (housing at fair market value, etc.). If you can’t claim a permanent tax home, then you don’t qualify for tax-free stipends. Tax-free stipends have two components, lodging is one and meals and incidentals is the other. Unfortunately, if you don’t qualify for tax-free stipends, then you don’t qualify for lodging stipends or food stipends because they’re tied together as the total allowance provided for expenditures individuals incur when traveling away from home. We know it can be confusing and always advise talking to a tax professional if you’re unsure whether you qualify for tax-free stipends.
Can gas receipts to and from work, car maintenance, car payment/insurance, cell phone things like that be used for tax right off?
Hello Heidi and thanks for reaching out! Unfortunately, the Tax Cuts and Jobs Act of 2018 did away with deductions like gas, mileage and food for travel nurses and other healthcare professionals, so you wouldn’t be able to deduct these travel-related expenses on your federal tax return. A handful of states still allow mileage deductions on your state return, so you might be able to use certain expenses on your state return but not your federal one. However, federal tax laws are subject to change, which is why we always suggest speaking to a tax professional familiar with tax rules related to travel healthcare workers to ensure you have the most up-to-date information and receive as many deductions as possible. If you itemize your deductions instead of taking the standard deduction, you may be able to claim some of the things you mention. Again, you should speak to a tax pro to see exactly what’s allowed in your specific situation.
Hello! I’m still confused about the laws. I’m in Colorado and about to travel out of state. I own a large home and want to rent out one room while I’m gone on furnished finder but can I still claim it is my home base if we still use the house? Thanks!
Hello Krystle and thanks for reaching out. We understand how confusing tax rules can be for travel nurses/HCPs. That’s why it’s so important to speak with a tax professional familiar with the unique tax rules for travel healthcare workers to ensure you’re following current IRS tax rules fully. From the information we’ve received, if you duplicate expenses at your permanent home and your temporary home while traveling and you claim any rental income you receive on your taxes, you may still qualify for tax-free stipends. However, we don’t have a tax pro on our staff. It’s essential that you seek out the advice of a professional tax preparer to cover all your bases.
Hi! If I am a traveling rad tech, do these same laws apply to me?
Hello and thanks for reaching out! Yes, the tax rules that apply to travel nurses apply to all travel healthcare professionals. Because tax laws change periodically, Vivian always advises travelers to contact a tax professional familiar with the unique tax rules of travel health jobs to ensure they stay current.
I am currently a travel nurse taking my first assignment in California but my tax home is Michigan. I have to fill out a tax home declaration for this assignment. I am having a hard time answering the question A. I maintain a tax home and the address of that tax home is ( mandatory, no PO Box and consistent with my W-4) or B. I do not maintain a tax home. As such, I understand the IRS considers my tax home the area of my temporary assignment.
Hello Akunna and thanks for reaching out! The travel staffing agency is trying to determine if you qualify for tax-free stipends. To do so, you must be able to declare a permanent tax home. For travel nurses and healthcare professionals, if you maintain a permanent residence (in Michigan) and duplicate expenses between your permanent home and a home you keep while on temporary assignment (in California), then you declare your permanent home (in Michigan) on your tax home declaration. Your permanent home address is what you use on your W-4. However, to ensure you’re following current IRS rules and correctly duplicating expenses to qualify for tax-free stipends, Vivian always suggests speaking with a tax professional familiar with the unique tax rules of traveling healthcare professionals. Congratulations on your first assignment!
Hi! Thank you for the article! I’m on my first contract job ever, and was told by my travel agency’s recruiter that because I signed two 6-month contracts, I don’t have to go home and can work at the same hospital indefinitely without getting audited by the IRS. Is this true? Also, my home is in Texas but I’m working in New Mexico. Does that mean that my New Mexico taxes will be reimbursed because my home is in Texas?
Thanks a bunch!!
Hello Ruben, Congratulations on your first travel contract! Vivian always suggests speaking to a local tax professional to ensure you follow all IRS rules because tax rules are complex and can change. However, even if you have separate contracts, if you work more than 12 months out of a 24-month period in the same location (even if it’s at a different facility and even if you take time off between contracts), you can lose your permanent tax home status and your tax-free stipends. Because Texas doesn’t collect personal income taxes, it could impact whether New Mexico keeps the personal income taxes it collected. Each state’s rules differ. Vivian doesn’t have a tax expert on staff, so it’s very important to contact a tax professional with knowledge of travel nursing tax rules to ensure you’re receiving all the reimbursements you deserve and you’re not doing anything that goes against IRS tax rules.
I’m a local traveler at my current assignment and have never taken a tax free stipend as my hourly waged is taxed instead. I am coming up on a year at this assignment. I know for nurses who take tax free stipends it is recommended that they do not surpass 1 year in any single contract. Would this apply to me as well even if I do not receive the tax free stipend or can I remain at my current assignment after my 1 year?
Hello Christine and thanks for reaching out! The 12 out of 24 months rule applies to nurses who don’t want to lose their permanent tax home, which would cause them to lose their tax-free stipends. Since you travel locally and don’t receive tax-free stipends, this shouldn’t have any impact on you. For more specific answers regarding your taxes, we always advise talking to a local tax expert.
so planning to get an assignment an hour away from home
and planning to stay in the hotel for only 3 nights is that okay?
Hello Roselyn and thanks for reaching out! If you’re wondering if it’s okay if you take tax-free stipends in this situation, you should speak to your recruiter and local tax expert to make sure it meets any stipulations the employer may have included in the travel contract and the specific tax rules in your state. Both can vary a great deal, so it’s not possible to make this determination without more information. To ensure you’re following all the rules, it’s best to speak to local experts who have all the pertinent details. We wish you the best of luck in your travels and hope we can be of assistance!
I live 50 mile radius from my travel assignment so I qualified to be paid as travel nurse with housing stipend, food and etc. I signed the “tax exempt” does it mean I owe IRS at the end of the year?
Hello Zoey and thanks for reaching out. You shouldn’t owe taxes on any untaxed stipends and per diems for meals and other incidentals. However, you do still pay income taxes on your actual salary. Be sure to speak to a tax professional to ensure you understand your tax liability and avoid any surprises at the end of the year.
Rachel – have a question – working on a travel assignment in Calif for almost a year – my tax home is in Texas. Would Calif be my tax home if I continue working there over a year? How would I continue to work in Calif and claim Texas as my tax home? Do I need to take a break of 2 -4 weeks and then continue to work in California with a completely different agency. thanks
Hello Linda, and thanks for reaching out. Changing agencies shouldn’t make a difference. It’s all about time and location. The generally accepted rule of thumb is never to work more than 12 months in any rolling 24-month period in the same metropolitan area. Most recruiters will tell you that you can stay as long as you want in the same state as long as you move to different areas of the state. However, it can get tricky if you work in two cities that aren’t in the same metro area but are close enough to allow a reasonable commute. You must also take care not to inadvertently become a resident of the state where you’re working, and it becomes your tax home. You always want to ensure you’re spending enough time in your tax home (Texas), and you can prove you’re duplicating expenses in California and Texas. Unfortunately, the IRS doesn’t provide clearly defined rules when discussing “area” or the time allowed in a given area, leaving it somewhat open to interpretation. Because we’re not tax experts, Vivian always encourages travelers to speak with a tax professional familiar with current travel nursing rules to ensure they stay in step with IRS tax rules.
Great article, thank you. I have one question. If I take a travel assignment in, let’s say San Diego CA, and work there for 9 months, can I then take an assignment in Sacremento CA for 9 months without having to pay back taxes on my per dium? I guess I’m wondering if the 12 months out of 24 months means one area or one state. Several nurses have told me that I will not be able to be in one state more than 12 months out of 24 months.
Thanks!
Thanks Lisa, we’re glad you liked it! The generally accepted rule of thumb is never to work more than 12 months in any rolling 24-month period in the same metropolitan area. Most recruiters will tell you that you can stay as long as you want in the same state, as long as you move to different areas of the state. However, it can get tricky if you work in two cities within the same state that aren’t in the same metro area but are close enough together to allow a reasonable commute. Also, you must take care not to inadvertently become a resident of the state you’re working in and lose your permanent tax home. Unfortunately, the IRS doesn’t provide clearly defined rules when discussing “area” or the time allowed in a given area, leaving it somewhat open to interpretation. Because we’re not tax experts, Vivian always encourages travelers to speak with a tax professional familiar with current travel nursing rules to ensure they stay in step with IRS tax rules.
Hi this article says fair market value should be paid for renting out a room or so in family or friends home for duplicating purposes if not having a lease of their own… I spoke with my tax person & I was told that shared expenses had a different story. Because it’s not technically “rent”… I was told if we were to send money for utilities and room or if the total pay for the utilities and mortgage is divided equally amongst those living in the same home, that – that is fine too so it may not always equal fair market value.
Hello JC, and thank you for sharing information provided by your tax expert! Vivian always recommends deferring to what your tax expert tells you, because they’re the experts. The fair market value wording is used to ensure new travelers understand that they can’t pay a very low amount, say $100 per month when a shared residence in their area typically goes for say $800 (these are just made up numbers) and claim they’re duplicating expenses. If you’re splitting up the cost, you should be paying your portion of the fair market value. IRS rules can be very confusing because they’re not black and white for travel nurses/HCPs, so talking to tax experts familiar with travel nursing rules is always best.
I lived in nebraska for a year and i used nebraska as my tax home for my new travel job in Virginia because I got the travel job while i was still in nebraska and I also had my driver’s license registration there. Must I use nebraska as my tax home because of the above reasons and can I still change my tax home to Virginia during the contract because I don’t have duplicating expenses to show. Will my stipends be taxed if I declare my new address in Virginia as my tax home? Do I need to pay state tax to nebraska even though I have moved permanently but I used the address on the tax home declaration my employer gave me?
Hello Bola and thanks for reaching out! If you work in Virginia and have permanently moved to Virginia without any duplicating expenses in Nebraska, then you no longer qualify for tax-free stipends. It would be wise to make the switch with your travel agency sooner versus later to ensure the appropriate amount of taxes are deducted from your salary. We would recommend speaking to your recruiter and a tax professional right away to ensure you don’t end up with a big tax bill. If you lived in Nebraska for part of the year, you may owe state taxes in Nebraska while it was your permanent tax home and owe state taxes in Virginia for the part of the year you become a permanent resident there. Depending on your situation, you may file as a part-year resident of Nebraska and a part-year resident of Virginia. Again, speaking to a tax professional is a good idea to ensure you file everything correctly. A tax expert should also be able to show where you can save money on your taxes.
Hello, thank you for a great article and opportunity to ask questions! I have my permanent tax home in hawaii and would take travel assignments in Texas this year. I want to relocate to Texas this year, will that make me get taxed back on all my previous travel to Texas even though I was living in Hawaii at the time?
We’re glad you liked the article, Rebecca. If you’re concerned about being taxed on tax-free stipends you received while living in Hawaii and working in Texas, you shouldn’t be required to pay taxes on those stipends as long as you have proof that Hawaii was your permanent tax home while you were taking travel assignments in Texas. No matter the situation, always be sure you can prove that you were duplicating expenses in both locations during a specific time period. We also suggest reaching out to a tax expert familiar with travel nursing to ensure you have all the appropropriate documentation and are following all current federal and state tax rules to cover all your bases. Best of luck with your upcoming relocation!
Hello!
If my parents RENT a property as their primary residence and do not OWN another home and I wanted to make the rented property my tax home… Would my rent or shared expenses (utilities) for this property be considered taxable income to my parents since they do not own the home? I would imagine not, and it would only be considered shared expenses to my parents and considered income to the landlord, but I wanted to double check.
Thank you for your time!
Thanks for reaching out! Tax laws regarding taxable income can be complicated and Vivian doesn’t employ a tax expert. Whether your parents would need to count your rent as taxable income could hinge on whether you’re included on the lease. Also, if you pay your rent to your parents who combine it with their money and pay the rent with one check on their own account, you may be technically renting from your parents and not the landlord. We advise you to speak to a tax professional in your area to ensure you’re truly paying rent to the landlord and not your parents to avoid confusion on the taxable income question.
If my tax home has been in Northern NJ for the last few years, but I have been travel nursing across the country in different areas (for 1.5 years), but now am planning on moving to southern NJ(about 100 minutes away)… Do I have to wait to take a travel job in the NYC/Northern NJ area and get per diems? If not, how long will I have to wait until I can?
Thanks for reaching out! There shouldn’t be a waiting period as long as you meet the permanent residence criteria in your new location. If you’re duplicating expenses per the IRS rules to receive tax-free stipends and you meet permanent residence criteria, you should be good to go. However, double-check with the travel agency and/or hiring facility to confirm when you qualify for tax-free stipends just to cover all your bases. Best of luck with your upcoming move!
Hello I have a question. I had an apartment in Los Angeles and took a travel contract in Boston. The first 5 months of my travel contract, I paid my apartment lease in LA while also paying rent in Boston. I did not renew my LA apartment lease during the middle of my 2nd contract in Boston and moved all my stuff to my parents house who lives in Orange County (considered same metropolitan area). If I share expenses and utilities with my parents on the house (pay each month part of mortgage and utilities) and change my drivers license and voters registration and forward all my mail there, as well as come home between contracts, is this enough to still qualify for the tax free stipends and be viewed okay by the IRS if audited ? I plan to work as a travel nurse in Boston no more than 9 months total as a travel nurse. Im trying to maintain California as my tax home
Thanks for reaching out, Lisa! Although Vivian doesn’t employ a tax expert, the general travel nursing rule is you must be able to prove that you contribute a ‘reasonable monetary amount’ (determined by the IRS) to a home that you own or rent. If you claim a rented room as a tax home (for example, at your parents’ house), the monthly amount paid must be comparable to similar market prices in the area. If you are audited and claim a permanent tax home, you must prove you’re duplicating expenses. It’s wise to ask in advance what you need as proof of a tax home so you can prepare any necessary paperwork. We suggest reaching out to a travel nurse tax expert for further advice.
Anyone know of this new IRS rule of having to break a contract for 35 days after being there 1 year?
Thanks for reaching out, Terry! Although Vivian doesn’t employ a tax expert, the general travel nursing rule has always been that you can’t spend more than 12 months in a single metro area within any rolling 24-month period to meet the tax exemption eligibility requirements. We suggest reaching out to a travel nurse tax expert for further advice.
How do I prove I paid a family member for housing come tax time?
Through apps like zelle or veno so you have proof! Never through cash. Then you can save these receipts and prove to IRS you are paying rent
I want to know if I am a travel nurse my home state is WI and I am doing an assignment in CA which state do I pay for taxes on my paycheck each week
Hi Michelle- sorry for the delayed response. You pay taxes where you work. So any work in WI- you will pay taxes on that income. For your assignment in California, you will pay CA state taxes and file a state tax return for CA during tax season.
I’ve been working in Texas, they do not have a state tax but I notice that I’m paying Alabama state taxes even though I’m not working there.
Alabama is my home state.
Actually you pay taxes in your home state AND in the state you work, if that state has a state income tax.
You will pay taxes in bothe states.
If your eligible at the end of the year and have a valid tax home, you will get the CA taxes refunded when you file.