What Is a Travel Nursing Tax Home?
Understanding travel nursing tax rules isn’t always straightforward. Among the most common areas of confusion for nurses on assignment is the concept of a tax home. This designation plays a major role in determining whether certain stipends, reimbursements, and housing allowances are considered tax-free or taxable income.
For travel nurses, establishing a tax home correctly can mean the difference between keeping more of your hard-earned paycheck or facing unexpected IRS liabilities down the road. Unfortunately, because tax laws can be complex and every nurse’s situation is unique, many travelers find themselves unsure about what qualifies as a tax home, how to maintain one, and what mistakes to avoid.
In this guide, carejobs.ai will walk you through the essentials of a travel nursing tax home. We’ll cover what it means, why it matters, and the key factors you should know before taking on travel assignments. With the right information, you’ll feel more confident about managing your finances while focusing on what you do best, delivering exceptional patient care.
How Travel Healthcare Professionals Are Paid
Travel nurses and allied health professionals typically receive compensation through two main structures:
- Blended Pay Package: This includes a mix of taxable hourly wages along with tax-free stipends to cover expenses such as housing, meals, and incidentals.
- Fully Taxable Income: In this model, the entire paycheck is subject to standard income taxes.
For those aiming to maximize their take-home pay, the blended pay structure is often the most beneficial. However, to qualify for tax-free stipends under this arrangement, travel healthcare providers must maintain a permanent tax home, a primary residence that remains separate from their temporary work locations.
What Is a Travel Nursing Tax Home?
Many professionals in the U.S., including truck drivers, sales representatives, flight attendants, and travel nurses, spend significant time working away from their primary residence. Because of this, the IRS recognizes that these workers often face additional costs for housing, meals, and transportation while on assignment.
Since these duplicate expenses are tied to business rather than personal needs, they can often qualify as tax-free allowances. This is why travel recruiters may structure part of your compensation as a tax-free stipend to help cover those extra costs.
To make this distinction clear, tax law defines a “tax home”, a fixed location that serves as your primary place of residence or main area of employment. When you are within your tax home area, your expenses are considered personal and not deductible. However, when you travel outside of your tax home for work and require another place to live, sleep, or rest, you may qualify for tax-free stipends.
In short, establishing and maintaining a valid tax home allows travel nurses and allied health professionals to legally reduce taxable income while offsetting the financial burden of working away from home.
Where Is My Tax Home?
For travel nurses, your tax home is not the physical house you live in, but rather the general area or city where you usually work and earn most of your income during the year. Understanding this distinction is important because it determines whether certain expenses are considered personal or business-related.
In most cases, the area surrounding your primary place of employment is your tax home. This is where you work the majority of the time, even if you also take on short-term travel assignments elsewhere.
Example:
Let’s say you spend about nine months of the year working as a school nurse in Fort Lauderdale, Florida, and then accept a three-month travel nursing assignment in Colorado during the summer. Since your main job is in Fort Lauderdale, your tax home is considered the metropolitan area around Fort Lauderdale. Your day-to-day living expenses there are treated as personal costs and are not eligible for tax-free stipends.
However, if you maintain your Fort Lauderdale residence while traveling, the expenses you incur for housing and living in Colorado count as duplicated living costs. In this situation, you may qualify to receive a tax-free stipend for the three months you’re on assignment in Colorado.
In short, your tax home is tied to where you work the most, and maintaining it allows you to benefit from tax-free stipends when you take travel assignments elsewhere.
What If I Don’t Have a Main Workplace?
For many travel nurses and healthcare professionals, there isn’t always a single “main” workplace. If your career is built around temporary assignments, per diem shifts, or short-term contracts in different cities, determining your tax home can feel confusing. In situations like these, your tax home is generally considered the location of your primary residence, if you have one.
To make this clearer, the IRS provides a set of guidelines (Publication 463) to help you establish whether your primary residence can also serve as your tax home when you don’t have a permanent workplace. You’ll need to look at the following three factors:
- You perform some of your work in the area where your primary residence is located, and you also use that residence for lodging while working nearby.
- You maintain ongoing living expenses at your primary residence that are duplicated when your assignments require you to live elsewhere.
- You haven’t abandoned the area of your main home, you still maintain ties such as family members living there, or you regularly return to that home for lodging.
To qualify for a tax home and receive tax-free stipends when working outside your regular area, you must meet at least two of these three criteria. Importantly, all of them point to the need for some type of “primary residence” that you maintain financially and return to periodically.
Example:
Let’s say you’re a travel nurse who spends most of the year working contracts along the West Coast. However, your permanent residence is in Providence, Rhode Island. You own or rent a home there, perhaps your spouse or children live there, and Rhode Island is where you keep your nursing license, vote, and maintain your driver’s license. In this case, Providence serves as your tax home.
If you accept a six-month assignment in California and rent an apartment while working there, you’re taking on duplicate living expenses. As long as you keep your Rhode Island home at the same time, you’re likely eligible to receive tax-free stipends during your California assignment since you’re working outside your established tax home.
Where Is Your Tax Home if You Don’t Have a Main Residence?
For many travel nurses, figuring out their tax home can feel complicated, especially if they don’t have a permanent residence. A travel nurse tax home is generally the city or metropolitan area where you regularly work or maintain significant financial and personal ties. But what happens if you don’t really have one fixed home base?
Some travel nurses live in temporary housing that changes with every new contract. Others adopt a nomadic lifestyle, traveling in an RV from assignment to assignment. If this sounds like you, the IRS considers you itinerant, which means you are always on the move and don’t maintain a permanent residence.
Being itinerant impacts your taxes significantly. Since tax-free stipends are meant to cover duplicated living expenses (such as maintaining a permanent home while also paying for temporary housing at an assignment), those who only have one “home” do not qualify. In this case, your housing, meals, and travel costs are considered personal expenses rather than business expenses, which means they cannot be reimbursed tax-free.
Renting a Tax Home from Family or Friends as a Travel Nurse
Some travel nurses try to establish a tax home by renting a room from family or friends. This is perfectly valid, but it must be done correctly to meet IRS standards.
The rent you pay must reflect fair market value, meaning the amount is consistent with what someone else would pay for similar accommodations in that area. The person collecting the rent must also report the payment as taxable income, just like a landlord would.
If you are paying rent to someone who is themselves a tenant (not the homeowner), you’ll need a sublease agreement in place. This agreement should confirm that you are paying market rates and that your rental arrangement is legitimate. To protect yourself, always keep thorough documentation such as:
- Copies of canceled checks or bank transfers
- Signed receipts for cash or money order payments
- A written lease or sublease agreement
Maintaining clear records ensures that if the IRS ever questions your travel nurse tax home, you can prove that your expenses are valid and that you qualify for tax-free stipends.
There’s No “50-Mile Rule” for Travel Nursing Assignments
A common misconception among travel nurses is the so-called “50-mile rule.” Many believe they can only receive tax-free stipends if their travel nursing assignment is located at least 50 miles from their permanent residence. While staffing agencies and hospitals sometimes use this rule as an internal policy to determine eligibility for travel contracts, it’s important to note that the IRS does not recognize a 50-mile rule.
According to IRS guidelines, eligibility for tax-free stipends is not based on distance but on duplicated housing expenses. In other words, you must maintain two separate places to live, your primary residence (or tax home) and temporary housing near your assignment.
For example, commuting 100 miles each way to your assignment does not qualify as working away from your tax home if you do not maintain additional lodging near the facility. Without duplicated expenses, your reimbursements cannot be considered tax-free under travel nursing tax home rules.
On the other hand, you may still be eligible for stipends even if your permanent tax home is less than 50 miles from your assignment. As long as you secure housing closer to your workplace and do not return home after every shift, your expenses may qualify. Because these rules can get complicated, it’s always best for travel nurses to consult a tax professional who understands IRS tax guidelines and travel nurse stipends.
Can Travel Nurses Take Assignments Near Their Tax Homes?
Yes, travel nurses can accept contracts close to their tax home. The key factor is not how far the assignment is, but whether you incur duplicated living expenses.
If you return to your permanent home every night instead of staying in temporary housing near the facility, the IRS may classify you as a local traveler. Local travelers do not qualify for tax-free stipends because they aren’t supporting two separate households.
However, if you rent or secure lodging near the assignment, even if it’s within 50 miles of your tax home, you may still meet the IRS requirements for a tax home and qualify for travel stipends. Documentation, consistency, and clear records of your housing arrangements are essential for proving eligibility.
Can Travel Nurses Rent Out Their Homes While on Assignment?
Yes, travel nurses who own a primary residence can choose to rent it out while they’re working away on assignments. However, it’s important to understand the tax responsibilities that come with this decision. Any income earned from renting out your home must be reported to the IRS. If you’re claiming that property as your tax home, which is essential for qualifying for untaxed housing stipends, you must prove that you’re still maintaining ongoing expenses for it. This typically includes costs like a mortgage, rent, property taxes, utilities, or upkeep. Documenting these duplicate expenses is key to staying compliant and protecting yourself from unexpected tax liabilities in the event of an audit.
Many travel nurses find renting their home beneficial because it helps offset expenses while they’re away. Still, it’s a strategy that must be approached carefully with full awareness of tax implications. Consulting with a tax professional before listing your property can help ensure you’re following IRS rules while maximizing your financial benefits.
Declaring a Tax Home as a Travel Nurse
Before starting an assignment, travel nurses are usually required to declare their permanent tax home with their staffing agency. This declaration is often made by filling out and signing a tax home form, which allows the agency to structure your compensation package in a way that includes tax-free stipends for housing and meals. Having a declared tax home not only helps reduce taxable income but also ensures you’re receiving benefits you are entitled to under IRS rules.
It’s wise to prepare your paperwork in advance. Agencies may request documentation such as a lease agreement, mortgage statement, or proof of regular household expenses. By being proactive, you can avoid delays and ensure your pay package is correctly structured from the start of your travel nursing contract.
Is It Possible to Work as a Travel Nurse Without a Tax Home?
Yes, it’s possible to take assignments without maintaining a tax home, but the IRS classifies such individuals as “itinerant workers.” For itinerant travel nurses, the location of the job essentially becomes the tax home. This classification means you won’t be eligible for tax-free stipends because you aren’t maintaining duplicate living expenses. Instead, all of your compensation is fully taxed.
While this might sound like a drawback, some travel nurses actually prefer this route. Not having a tax home simplifies record-keeping, and you don’t need to worry about proving duplicate expenses during an audit. However, if you’re not claiming a tax home, you should notify your recruiter immediately. This allows the agency to restructure your pay package accordingly, ensuring that your wages are properly taxed and compliant with IRS guidelines.
It’s also worth noting that some hospitals or staffing agencies impose their own distance requirements for travel nurses, commonly referred to as the “50-mile rule.” While the IRS does not recognize this rule, facilities often use it to determine eligibility for travel contracts. This requirement is set by the employer or staffing agency, not federal tax authorities.
Drawbacks of Claiming a Tax Home as a Travel Nurse
Although maintaining a tax home provides access to untaxed stipends, it isn’t always advantageous. One major drawback is that tax-free stipends reduce the income reported on your W-2. While this lowers your taxable income and can help you save money upfront, it can also present challenges when applying for loans, mortgages, or credit cards. Lenders may view your reported income as lower than your actual earnings, which could affect your ability to qualify for financing.
For travel nurses who want to demonstrate higher reported earnings, choosing not to maintain a tax home and accepting fully taxable wages may be the better option. This way, your true income is reflected on tax documents, which can strengthen your financial profile when seeking credit approval.
Avoiding Costly Mistakes, Why Travel Nurses Should Consult a Tax Expert
Taxation for travel nurses can quickly become complex, especially when working multiple assignments across different states in a single year. Each state may have its own filing requirements, residency rules, and income tax obligations. Without proper guidance, it’s easy to overpay, underpay, or miss a critical filing, which could trigger penalties.
Seeking help from a qualified tax professional who understands travel nursing tax rules can save you from costly mistakes. A tax advisor can:
- Guide you through declaring and maintaining a tax home.
- Help with multi-state tax filings.
- Ensure you’re maximizing deductions and eligible stipends.
- Represent you in the event of an IRS audit.
Although there may be fees associated with professional tax services, the cost is often minimal compared to the financial risks of non-compliance. Tools like Intuit TurboTax and H&R Block also offer different levels of support, ranging from self-guided software to full tax preparation services, which can be especially helpful for travel nurses navigating complex returns.
Final Thoughts
Travel nursing offers incredible freedom, flexibility, and financial rewards, but managing the tax side of this career is just as important as choosing your next assignment. Whether you decide to declare a tax home, rent out your residence, or work as an itinerant nurse, understanding the IRS rules can protect your income and prevent unexpected tax bills.
For the best results, always document your expenses carefully, communicate openly with your recruiter about your tax home status, and seek expert advice when needed. A solid tax strategy allows you to focus on what matters most, your career as a travel nurse and the patients you care for along the way.
