Recruiter called me about a 13-week local contract for med-surg, about 40 minutes from my house. The total weekly number looks great on paper, but when I asked for the breakdown, the hourly taxable rate was like $22 and everything else was housing and meal stipends.
I don't even live far enough away to need housing, so I'm pretty sure I wouldn't qualify for the stipend part anyway. When I asked her about that she got kind of vague and said 'we can figure that out.'
For the people who travel or do local contracts, is this just how it works? Or is that a red flag that I'd be the one holding the bag at tax time? I don't want to walk away from decent money because I'm paranoid, but I also don't want an audit in two years.
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Post replyThe part that gets me is $22 taxable. That's less than our new grads make at my hospital, and agencies act like that's a normal base for an experienced med-surg nurse. Whole system is built on making the hourly look bad and the stipend look shiny.
Did they ask for your permanent address or proof of a tax home anywhere in the paperwork? If they never brought it up, that tells you a lot about how they handle compliance.
Low taxable base with big stipends is pretty standard for actual travelers, so I wouldn't write off the whole agency yet. The problem is just that it doesn't fit your situation. Ask them to requote it as fully taxed for a local. Some agencies will, and the gross usually drops less than people expect.
Girl on my unit did almost exactly this. Local contract, mostly stipend, recruiter said it was fine. Two years later she got a letter and owed back taxes plus penalties on all of it. She still won't talk about the number.
'We can figure that out' is the red flag. Stipends are supposed to cover duplicate expenses because you're away from your tax home. At 40 minutes from your house there's nothing duplicated, and the agency won't be the one explaining that to the IRS.