Travel Nurse Tax Home: The Basics

Your tax home is, for federal tax purposes, generally your regular or main place of work, not simply the address on your driver's license. For travel nurses who work in many places, the practical question is usually whether you keep a permanent home that you maintain, pay for and return to. If you do, you may be able to receive travel stipends tax-free while you're away from it; if you don't, you're generally treated as itinerant and stipends are taxable. The rules are complex, so use this as background and get advice from a tax professional.

Why your tax home matters

Tax-free travel stipends exist to cover the extra cost of working away from home, and you can only be away from home if you have one. Your tax home is the anchor point that decides whether your housing and meal stipends can be paid without tax. Our guide to travel nurse stipends explains how those payments are usually structured.

Getting it wrong can be expensive. If you take non-taxable stipends without a valid tax home, you could owe tax on them later, along with possible penalties and interest.

How the IRS generally looks at it

For people without one regular place of work, IRS guidance on travel expenses looks at three factors, in plain terms:

1. You do some of your work in the area of your main home and live in that home while you do.
2. Your living expenses at that home are duplicated when work takes you away.
3. You haven't abandoned the area: it's where you've historically lived, family members live in the home, or you often use it as your home.

If you clearly meet all three, that home is generally treated as your tax home. Meeting only some of them makes the answer less certain, and meeting few or none generally means you're treated as itinerant. A tax professional can apply these factors to your actual facts.

What typically supports a tax home

In practice, travelers who keep a tax home usually:

• Pay real, ongoing costs for the home. A mortgage or rent, property tax, utilities and upkeep. If you live with family when you're home, tax professionals generally advise paying a fair rent and keeping records of it.
• Return regularly. Spend time there between assignments and during time off.
• Work in the area sometimes. Some travelers pick up shifts near home between contracts. Local nursing jobs and per diem roles can fill those weeks; see how per diem pay compares with staff pay.
• Keep ties to the area. Driver's license, voter registration, vehicle registration, bank accounts and doctors. These support your case, but they don't replace actually maintaining the home and having duplicated costs.

Situations that complicate things

• Renting out your home while you travel. If someone else lives there and you have no place to return to, it may not work as your tax home.
• Living full time in an RV or moving between short stays. Without a fixed home you maintain, you may be treated as itinerant.
• Selling your home or ending your lease. Stipends may become taxable from that point.
• Staying with parents rent-free. Without duplicated expenses, that home may not count.
• Long stays in one place. Work in one area that's expected to last a long time, or that stretches on through repeated extensions, can stop being temporary in the eyes of the IRS. Time-based rules apply here, so check with a tax professional before extending again and again in the same area. Our article on whether to extend or move on covers the other factors in that decision.

Agency distance rules are not IRS rules

Many agencies require your permanent address to be a certain distance from the assignment before they'll pay non-taxable stipends. That's an agency policy meant to manage the agency's risk, not an IRS test for tax homes. Meeting the agency's rule doesn't prove you have a tax home, and failing it doesn't mean you lack one.

Agencies often ask you to sign a statement confirming your permanent residence. Answer truthfully, and remember that you remain responsible for your own tax return.

State taxes add another layer

Working in several states can mean filing returns in more than one state, depending on where you earned income and where you're a resident. States treat residency and credits for taxes paid to other states differently, and some states have no income tax at all. A tax professional familiar with travel nurses can help you work out which returns you need.

Records worth keeping

Keep a simple file for each year:

• Mortgage or lease, property tax and utility bills for your home
• Contracts and pay stubs for each assignment
• Leases or receipts for assignment housing
• A calendar of the dates you were at home and on assignment
• Travel receipts and mileage
• Proof of ties, such as license and registration renewals

Questions to bring to a tax professional

• Based on my living situation, do I have a tax home?
• If I stay with family, what should rent and documentation look like?
• How long can I work in one area before it may no longer count as temporary?
• Which state returns will I need to file?
• What records should I keep, and for how long?

Look for someone who regularly works with traveling healthcare workers. Once you understand your situation, compare offers on travel nurse jobs, where the pay is shown, and use our tips for negotiating travel nurse contracts before you sign.

Next step

Travelers who've set up a tax home can tell you what worked for them. Ask in the travel nurses network group, and run any advice past your own tax professional.

General information for nurses, not medical, legal, tax or financial advice. Follow your facility's policies, your state board of nursing and the terms of your employer or contract.