What Is a Travel Nursing Tax Home?

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Understanding travel nursing tax rules can be tricky, and travel nursing tax homes are at the heart of many travelers’ questions. In this guide, Vivian Health strives to answer some common questions to clarify the concept of a travel nursing tax home.

How Travel Healthcare Providers Get Paid

Registered nurses (RNs) and other healthcare providers who take travel nursing jobs or travel allied health jobs get paid in two ways:

1. Blended Rate: A combination of taxable hourly wages and tax-free stipends for living expenses
2. Fully Taxable Salary: All earnings get taxed

To qualify for a blended rate, which results in higher take-home pay than someone with a fully taxed salary for the same job, travel workers must have a permanent tax home—a primary residence separate from the location of their travel assignments.

RELATED: Dollars and Sense: Travel Nurse Salaries Explained

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What Is a Travel Nursing Tax Home?

Many U.S. workers, such as long-haul truck drivers, salespeople, flight attendants and travel nurses, often work far from their main workplace or primary residence. U.S. tax law acknowledges that these workers may incur additional work-related housing, food and transportation expenses while away. 

Since these duplicated living expenses are considered business-related rather than personal, they’re often exempt from income taxes. This scenario is when a travel recruiter can offer part of your pay as a tax-free stipend.

Tax law designates a specific location as your tax home to distinguish between personal and business expenses. When you’re in the area of your tax home, your living expenses are personal expenses and aren’t tax-free. When you travel away from your tax home for work and need a second location to rest, sleep or live, you may be eligible to receive tax-free stipends.

In short, establishing a tax home can help travel nurses and allied health professionals reduce their taxable income and manage the costs of working away from home.

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Where Is My Tax Home?

The tax home for travel nurses depends on where you live and work during the year. Determining your tax home can get confusing, but we offer some examples to clarify the concept. Your tax home isn’t the actual building you live in. It’s a general area like a city or metropolitan region.

The general area around your main workplace is usually a person’s tax home. It’s wherever you work the most during the year. We’ll cover situations if you don’t have a main workplace further below.

Here’s an example:

You work for roughly 9 months of the year as a school nurse in Fort Lauderdale, FL, and take a 3-month travel assignment to the cooler weather of Colorado for the summer. Your tax home is the metropolitan area around Fort Lauderdale, because it’s your main workplace. Your living expenses while working in Fort Lauderdale are personal expenses, and you can’t receive a tax-free stipend while living and working there.

However, as long as you keep your school-year home during the summer, your living expenses in Colorado are duplicated living expenses outside your tax home. Therefore, you can probably receive a tax-free stipend while on assignment during those 3 months in Colorado.

RELATED: Understanding Travel Nursing Tax Rules

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What Is My Tax Home If I Don’t Have a Main Workplace?

Some health professionals don’t have a main place of work because they string together multiple temporary assignments or per diem work in different locations. In this case, your tax home is probably the location of your primary residence or main home, if you have one. 

The IRS uses a test to help you determine if your main home is your tax home when you don’t have a main workplace. You must consider which of these three statements, copied directly from IRS publication 463, applies to you: 

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.

 You need to satisfy at least two of these three factors to have a tax home and receive tax-free travel stipends when working outside the regular area you call home. Notice that all three of these factors require you to have some type of “main home” that you pay for and go back to from time to time. 

Here’s an example:

You’re a nurse who mainly works travel assignments on the West Coast, but you consider Providence, Rhode Island, your primary residence. You keep a home in Providence, your spouse and/or child may live there, and Rhode Island would be where you maintain your nursing license and perhaps vote and have a driver’s license. In this case, Rhode Island is probably your travel nursing tax home. 

While on assignment in California for 6 months, you must rent an apartment there to have somewhere to live. As long as you simultaneously keep your Rhode Island home, you’re likely eligible for tax-free travel stipends while in California, outside your tax home.

Related: Travel Nurse Housing Tips and Tricks

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Where Is Your Tax Home if You Have No Main Home?

Travel nurses who take contracts close enough to their tax home that allow them to

Not everyone has a main home that’s different from their travel home. For instance, some travel nurses only live in temporary housing which changes every time they take a new travel nursing assignment. Additionally, some travel nurses live in an RV and travel from assignment to assignment in it. If you maintain this lifestyle without a permanent fixed home location, the tax law considers you an itinerant—a person always moving from place to place. 

When you’re itinerant, your living expenses can’t be considered tax-free business expenses. Understand that the legal purpose of the tax-free stipends is for people with duplicated living expenses that are unavoidable due to work. If you only have one home, you have no duplicated expenses, so you don’t get special tax treatment and can’t get paid a blended rate.

Renting a Tax Home from Family or Friends as a Travel Nurse

Some travel nurses recognize that they can create a tax home by renting a room from family or friends at a location away from their travel assignment. That’s okay, provided you aren’t getting a special deal on the rent. You must pay a “fair market value” rent, meaning the rent reflects the typical cost for a similar room in the area. Additionally, the person receiving the rent must report it as income on their taxes, just like a regular landlord should.

If you’re renting from someone who doesn’t own the home but is a tenant themselves, and you’re not listed on the lease, creating a sublease agreement is essential. This document should confirm that you pay market rates for the room each month. Keep thorough records of rent payments, including copies of canceled checks, money order receipts or rental receipts signed by the person collecting the rent.

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There’s No “50 Mile Rule” for Travel Assignments

For years, travel nurses were told they could receive tax-free stipends if their assignments were at least 50 miles from their permanent home. While hospitals and staffing agencies may use this 50-mile rule for their own purposes, it’s not an IRS rule or requirement.

Tax-free stipends depend on duplicated housing expenses—not distance. Commuting 100 miles daily to work won’t qualify as travel outside your tax home if you don’t maintain additional lodgings near your job. To receive tax-free stipends, you must have a second residence closer to work and avoid returning home after every shift.

Moreover, you may still qualify for tax-free stipends if your main home is within 50 miles, as long as you stay in separate housing between shifts. However, if your assignment is less than 50 miles from home, we recommend consulting a tax expert to confirm eligibility.

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Can Travel Nurses Work Near Their Tax Homes?

Yes, travel nurses can accept contracts near their tax home. However, if they return home each night rather than securing lodging near the assignment, they’re likely considered local travelers. Local travel nurses don’t receive tax-free stipends because they aren’t duplicating living expenses in two areas.

RELATED: How Travel Nurse Housing Stipends Work

Can Travel Nurses Rent Out Their Homes While on Assignment?

Yes, travel nurses who own their primary residence can rent it out while they’re away. However, they must report any rental income on their taxes. If the home is claimed as their tax home to qualify for untaxed housing stipends, they must demonstrate they’re maintaining duplicate expenses, such as rent, mortgage or property taxes on the home. This documentation is crucial to avoid unexpected liabilities during a tax audit.

Declaring a Tax Home as a Travel Nurse

Travel nurses must declare their permanent tax home by completing and signing a form with their travel nursing agency before starting a contract. This declaration allows the agency to structure compensation packages that include tax-free stipends. It’s advisable to confirm what documentation is required to prove a tax home in advance, ensuring all necessary paperwork is ready before submitting the declaration.

RELATED: Understanding Travel Nurse Residency Rules

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Is It Possible to Travel Nurse Without a Tax Home?

Yes, travel nurses can take assignments without a tax home. However, they won’t be eligible for tax-free stipends. Without a fixed place of business or regular residence, the IRS classifies them as itinerant workers, meaning their tax home is wherever they work. Since they aren’t duplicating living expenses, they can’t receive untaxed stipends for housing during assignments.

If you don’t plan to claim a tax home or receive tax-free stipends, inform your recruiter as soon as possible. This decision affects contract terms, and the recruiter must provide a new pay package based on fully taxed wages.

However, some hospitals or health systems may have minimum distance requirements for travel nurses to qualify for a role. This requirement is often mistaken for the “50-mile rule.” As noted above, the IRS doesn’t have such a regulation. The hospital or staffing agency typically sets any distance requirement, not tax authorities.

Drawbacks of Claiming a Tax Home as a Travel Nurse

While missing out on tax-free stipends may seem like a disadvantage, not claiming a tax home can have some benefits. Tax-free pay reduces the income reported on your W-2, making your earnings appear lower than they actually are. This lower income on your tax return could limit your ability to qualify for some loans, mortgages or credit cards. If you want documentation showing you earn a higher income, you may benefit from paying taxes on all your income rather than taking a blended rate.

Avoid Costly Mistakes — Consult a Tax Expert

Managing taxes as a travel nurse can get complicated, especially if you work across multiple states throughout the year. Seeking advice from a tax expert can help you stay on track and guide you through multistate fillings, prevent an over-payment or underpayment of taxes and provide support if you’re audited or encounter issues with your return. 

While these services may require a fee, the cost is often far less than the potential expense of tax mistakes. Consider Intuit TurboTax, which offers self-service, assisted and full-service options, or H&R Block for self-serve or assisted services.

Learn more about travel nursing, including information on stipends, taxes, housing, bill rates and salary, along with many other helpful topics on Vivian’s Resource Hub under the Travel Nursing category.

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Editor’s Note: This blog post was originally published in July 2021 and has been updated to reflect current information.
Disclosure: If you click on the included links, we may receive compensation.
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