Your tax home (the three-factor test)
The rule (settled)
Your tax home is your regular place of business. If you have none, it's the place where you regularly live. If you have neither, you are itinerant: your "tax home is wherever you work," and you can't deduct travel. Any travel stipend is then taxable wages. (Pub 463 (2025), ch. 1)
Pub 463 restates the three factors from Rev. Rul. 73-529 (cited 1973-2 C.B. 37):
- You do part of your business in the area of your main home and use that home for lodging while doing business there.
- Your living expenses at your main home are duplicated because your business requires you to be away.
- You haven't abandoned the area of your historical place of lodging and claimed main home: family lives there, or you often use that home for lodging.
- All 3 factors: you have a tax home.
- 2 factors: decided on all the facts and circumstances.
- 1 or none: itinerant.
What it means for you
- Keep paying for your main home (rent or mortgage, utilities, insurance) while you're on assignment. That's factor 2.
- Work some shifts at home between contracts, such as PRN, and sleep at home while you do. That's factor 1.
- Go home regularly. Keep your driver's license, voter registration, vehicle registration, bank, and doctors in your home area. That's factor 3.
- Log every visit home and every housing payment.
Gray areas
- Meeting only 2 of 3 factors.
- Renting from family: how much rent is "enough" isn't defined. Pub 463's example of a worker who kept an unpaid room at a relative's house came out itinerant. Use a written lease at fair rent and pay by bank transfer.
- Citation note: INFO 2019-0003 prints "1973-1 C.B. 2," while secondary sources give 1973-2 C.B. 37. The factors themselves are confirmed in Pub 463.
Go deeper
- Statute. IRC §162(a)(2) allows deductions for travel expenses, including meals and lodging, "while away from home in the pursuit of a trade or business."
- IRS definition. Your tax home is generally your regular place of business or post of duty, regardless of where your family home is. If you have no regular or main place of business, it may be the place where you regularly live. If you have neither, you are an itinerant whose "tax home is wherever you work," and you "can't claim a travel expense deduction." (Pub 463 (2025), ch. 1)
- Pub 463 sets no minimum number of days home, and no fixed mileage distance appears in the factors. The "50-mile rule" some agencies use is an agency policy convention, not an IRS test.
Example From the research
Pub 463's own itinerant example is a warning sign. A worker keeps a room at his sister's house, stays one or two weekends a year, does no work in the area, and doesn't pay for the room. He meets none of the three factors, so he is itinerant. (Pub 463 (2025), Example 2)
Example numbers are hypothetical and come from the source research. Your situation will differ.
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.
- 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
Watch: What's a tax home?
Transcript
- Travel stipends and travel deductions depend on having a tax home.
- It's generally your regular place of business. With none, it's where you regularly live. With neither, you're itinerant.
- Factor 1: work in your home area and lodge there. Factor 2: duplicated living costs. Factor 3: you haven't abandoned the home area.
- All 3 factors: a tax home. 2: facts and circumstances. 1 or none: itinerant, and stipends are taxable wages.
- Keep paying for your main home while you're away, work and sleep there between contracts, and log every visit home.
- Research, not tax advice. Confirm with a CPA or EA before filing.
What to keep
- Lease or mortgage statements for your main home, kept during assignmentsFrom: Nurse tax brief §5
- Utility, internet, and renter's/homeowner's insurance bills in your name at that addressFrom: Nurse tax brief §5
- Rent payment trail (bank transfers, not cash). If you rent from family: a written lease at fair market rent, plus proof of payment.From: Nurse tax brief §5
- Driver's license, voter registration, and vehicle registration at the tax-home addressFrom: Nurse tax brief §5
- Log of trips home: dates, receipts, boarding passes or fuel receiptsFrom: Nurse tax brief §5
- PRN or other work in the home area between contracts (pay stubs)From: Nurse tax brief §5
Sources
- Pub 463 (2025), Travel, Gift, and Car Expenses, ch. 1https://www.irs.gov/pub/irs-pdf/p463.pdf
- IRS Chief Counsel INFO 2019-0003 (cites Rev. Rul. 73-529)https://www.irs.gov/pub/irs-wd/19-0003.pdf
Research, not tax advice. Confirm with a CPA or EA before filing.