Tax home & travel pay

Common travel-nurse tax mistakes

Last verified: 2 min read From the research brief
Printable checklists
Warning signs on a travel contractFour warning signs: no duplicated expenses at home; renting from family at a token rate with no lease; a wash-rate offer with a very low taxable hourly rate; and repeated contracts in the same location adding up to more than a year.!No duplicated expensesLiving free, or gave up the lease!Token family rentNo lease, no payment trail!Wash-rate offerLow taxable hourly, big stipend!Same place, over a yearBack-to-back extensions
Warning signs on a travel contract

Settled law vs. gray areas

Settled: the tax-home definition and itinerant rule; the one-year rule; accountable plan rules (per diem over the federal rate is taxable; a nonaccountable plan means wages); wage recharacterization is disallowed, including the nurse staffing fact pattern.

Gray / facts-and-circumstances:

  • Meeting only 2 of 3 tax-home factors; how much "rent to family" is enough
  • How often you must return home; repeat contracts in the same metro (the agency "12-in-24" convention isn't an IRS rule)
  • Whether a given PRN agency arrangement is truly 1099 (worker classification)
  • Scrubs as "not suitable for everyday wear"; commuting from home to PRN sites; home office as principal place of business

Common mistakes

  • Claiming a tax home with no duplicated expenses, such as living free with family or giving up your leaseFails factor 2; likely itinerant, so all stipends are taxableSource: Pub 463 (2025), factors and Example 2
  • Renting from family at a token or below-market rate, with no lease or payment trailWeak evidence of real duplicated expense. Pub 463's example of not paying for a room led to itinerant status.Source: Pub 463 Example 2. Exactly how much rent is "enough" is a gray area.
  • Wash-rate / lowball hourly pay (e.g., taxable rate near minimum wage, the rest as stipend) that doesn't change whether or not you travelRecharacterization, so the whole package is wages. Also lowers Social Security wages and future benefits, and can cut overtime, unemployment, and disability pay.Source: Rev. Rul. 2012-25
  • Repeated contracts in the same location that together cover a long periodMay be treated as one indefinite assignment, which would make stipends taxable from that point. There is no IRS day count (gray area).Source: Pub 463 (2025), ch. 1 ('series of assignments'); IRC §162(a)
  • Taking "travel" stipends at your tax-home area (local contract while living at home)You aren't away from homeSource: Pub 463
  • Keeping no proof (lease, utility bills, trips home)You carry the burden of proofSource: Pub 463 ch. 5
  • Deducting expenses the agency already reimbursedDouble benefit, not allowedSource: Pub 463 ch. 6

Watch: What's a tax home?

Narrated explainer · 48 seconds · spoken narration with on-screen captions

Transcript
  1. Travel stipends and travel deductions depend on having a tax home.
  2. It's generally your regular place of business. With none, it's where you regularly live. With neither, you're itinerant.
  3. Factor 1: work in your home area and lodge there. Factor 2: duplicated living costs. Factor 3: you haven't abandoned the home area.
  4. All 3 factors: a tax home. 2: facts and circumstances. 1 or none: itinerant, and stipends are taxable wages.
  5. Keep paying for your main home while you're away, work and sleep there between contracts, and log every visit home.
  6. Research, not tax advice. Confirm with a CPA or EA before filing.

Sources

Research, not tax advice. Confirm with a CPA or EA before filing.