As a travel nurse, understanding tax home requirements is critical to keeping your non-taxable stipends legal and avoiding IRS audits. Mistakes in establishing or maintaining your tax home can result in thousands of dollars in back taxes, penalties, and interest—plus the loss of your tax-free housing and meal allowances.

This comprehensive guide explains IRS Publication 463 requirements, how to establish and maintain a compliant tax home, what documentation you need, and how to avoid the most common mistakes that trigger audits.

What is a Tax Home?

Your tax home is your regular place of business—the general area where you work most of the time. This is not necessarily where you live or where your family lives.

According to IRS Publication 463:

"Your tax home is the entire city or general area where your main place of business or work is located, regardless of where you maintain your family home."

Why Tax Home Matters for Travel Nurses

Travel nurses work temporary assignments away from their permanent home. To deduct or exclude travel expenses (housing, meals, travel) from taxable income, you must:

Have a tax home (a permanent place you return to)
Be traveling away from that tax home for work purposes
Maintain duplicate expenses (paying for your tax home while also paying for housing on assignment)

If you don't have a valid tax home, your stipends become taxable income.

IRS Requirements for a Valid Tax Home

The IRS uses a three-factor test to determine if you have a tax home:

1. You Maintain Duplicate Living Expenses

You must incur duplicate expenses—paying for your permanent residence (tax home) while also paying for temporary housing on assignment.

Examples of duplicate expenses:

Rent or mortgage at your tax home
Utilities (electric, gas, water) at your tax home
Rent for temporary housing on assignment
Meals while traveling

Critical: You must actually pay these expenses. Simply having your name on a lease isn't enough—canceled checks, bank statements, and receipts are required.

2. You Have Not Abandoned Your Tax Home Area

You must demonstrate ongoing ties to your tax home area, such as:

State driver's license or ID from tax home state
Vehicle registration in tax home state
Voter registration in tax home state
Bank accounts with tax home address
Professional licenses using tax home address
Medical providers, dentists in tax home area
Personal property stored at tax home

3. You Have a Reasonable Expectation of Returning

You must intend to return to your tax home area after assignments. Evidence includes:

Booking return travel to your tax home between assignments
Actually returning to your tax home periodically
Maintaining employment opportunities in tax home area
Family living at tax home

Red flag: Taking consecutive assignments in the same location without returning to your tax home suggests you've moved your tax home to that location.

The 12-Month Rule

The IRS generally considers assignments lasting more than 12 months as indefinite, meaning:

Your tax home shifts to your assignment location after 12 months
Stipends become taxable after that point
You lose tax-free status for housing and meal allowances

Best practice: Limit assignments in the same area to under 12 consecutive months. If you want to stay longer, return to your tax home for a period, then take a new assignment.

50-Mile Rule

While not an official IRS rule, agencies and tax professionals commonly use a 50-mile radius test:

Assignments within 50 miles of your tax home are generally considered "local" (not travel)
Assignments more than 50 miles away qualify as travel assignments

Taking assignments within 50 miles of your tax home can jeopardize your tax-free status.

Establishing Your Tax Home

To establish a compliant tax home, follow these steps:

Step 1: Secure a Permanent Residence

You need a permanent address in your tax home area. Options include:

Own or rent a home/apartment: Best option if you return regularly
Live with family: Can work if you pay rent and have documentation
Use a residential address service: For nurses who don't maintain physical property

Important: P.O. Boxes do NOT qualify as tax homes. You need a physical street address.

Your Tax Base provides residential addresses with lease documentation and utility bills for travel nurses who need a tax home without maintaining physical property.

Step 2: Maintain Duplicate Expenses

Ensure you're paying for both:

Expenses at your tax home (rent/mortgage, utilities)
Expenses on assignment (rent, meals)

Documentation required:

Lease or mortgage statements
Utility bills (electric, gas, water, internet)
Canceled checks or bank transfers showing payment
Receipts for assignment housing

Step 3: Establish State Ties

Demonstrate you're connected to your tax home state:

Get a driver's license from your tax home state
Register to vote in your tax home state
Register your vehicle in your tax home state
Update your nursing license to show tax home address
Open bank accounts in your tax home area
Get auto insurance from tax home state

Step 4: Return to Your Tax Home Regularly

Visit your tax home between assignments or during time off. This demonstrates:

You haven't abandoned your tax home
You have a reasonable expectation of returning
Your tax home is your true permanent residence

Best practice: Return to your tax home for at least a few weeks between every 1-3 assignments.

Common Tax Home Mistakes

Using a P.O. Box or Mail Drop

P.O. Boxes and commercial mail receiving agencies (CMRA) like UPS stores are not valid tax homes. The IRS requires a physical residential address.

Solution: Use a residential address service with an actual street address and lease documentation.

Not Paying Duplicate Expenses

Having your name on a lease isn't enough—you must actually pay rent and utilities. Keep:

Canceled checks
Bank transfer confirmations
Utility bills in your name
Receipts

Taking Assignments Within 50 Miles of Tax Home

Working close to your tax home area suggests it's not truly "travel." Stick to assignments 50+ miles away.

Staying in One Location for 12+ Months

After 12 months, the IRS considers your assignment location your new tax home. Your stipends become taxable.

Solution: Limit consecutive assignments in the same area to under 12 months, or return to your tax home for a break.

Never Returning to Your Tax Home

If you never visit your tax home between assignments, the IRS may argue you don't have a reasonable expectation of returning.

Not Documenting Anything

The burden of proof is on you to show you have a valid tax home. Without documentation, the IRS will disallow your tax-free stipends.

What the IRS Looks For in an Audit

If audited, the IRS will request:

Proof of Permanent Residence

Lease or mortgage documents in your name
Utility bills in your name at tax home address
Receipts for rent/mortgage payments

Evidence of Duplicate Expenses

Bank statements showing payments to both tax home and assignment housing
Receipts for assignment lodging
Meal expense records

Proof of State Ties

Driver's license from tax home state
Voter registration card
Vehicle registration
Bank statements with tax home address
Professional licenses with tax home address

Evidence of Returning to Tax Home

Travel receipts (flights, gas, etc.) showing return trips
Calendar or log showing time spent at tax home
Photos, social media posts from tax home area

Assignment History

Contracts showing assignment locations and durations
Proof assignments were temporary (under 12 months)
Evidence assignments were 50+ miles from tax home

Tax Benefits of a Valid Tax Home

Tax-Free Stipends

With a valid tax home, you can receive tax-free:

Housing stipends: $1,500 - $3,000+ per month
Meal allowances: $200 - $500+ per month
Travel reimbursements: Flights, gas, mileage

These are not subject to federal income tax, Social Security tax, or Medicare tax.

Higher Take-Home Pay

Because stipends aren't taxed, travel nurses with valid tax homes take home significantly more than local staff nurses earning the same total compensation.

Example:

Total compensation: $100,000/year
Taxable wage: $60,000
Tax-free stipends: $40,000
Tax savings: ~$10,000 - $15,000/year

Special Situations

Travel Nurses Who Are Married

If you're married, your tax home can be where your spouse lives—even if you don't own or rent property there. However, you must still:

Have duplicate expenses (contributing to household costs)
Return regularly
Maintain ties to that area

Travel Nurses Living in RVs or Vans

If you live in an RV or van full-time, establishing a tax home is more difficult. Options:

Establish domicile in a tax-friendly state (South Dakota, Texas, Florida)
Use a residential address service
Maintain documented expenses at that address
Return to that state periodically

International Travel Nurses

If you take international assignments, the same tax home principles apply. However, you may also qualify for the Foreign Earned Income Exclusion (FEIE) if you meet physical presence or bona fide residence tests.

State Tax Implications

Your tax home state may also tax your income. To minimize state taxes:

Establish tax home in a zero-tax state (Texas, Florida, Nevada, South Dakota, etc.)
File part-year or non-resident returns in states where you work temporarily
Claim credits to avoid double taxation

See our guides on Florida residency and state tax planning.

How Your Tax Base Can Help

Your Tax Base specializes in tax home solutions for travel nurses:

Residential street address in zero-tax states (Florida, Texas, Nevada)
Lease documentation for IRS compliance
Utility bills in your name (electric, water, etc.)
Mail forwarding to wherever you're working
License tracking for multi-state nursing licenses
Audit-ready documentation at any time

View pricing or contact us for a custom solution.

Frequently Asked Questions

Can I use my parents' address as my tax home?

Yes, if you pay rent (even nominal) and have documentation. Keep canceled checks, a rental agreement, and evidence of your expenses.

Do I need to return to my tax home every month?

Not necessarily. Returning every 3-6 months is generally sufficient, as long as you maintain expenses and ties. Frequency depends on your situation.

What if I'm audited and don't have documentation?

Without documentation, the IRS will likely disallow your tax-free stipends, requiring you to pay back taxes, penalties, and interest. Always keep records.

Can I have a tax home in a state where I don't work?

Yes. Your tax home is your permanent residence, not where you work on assignment. Many travel nurses have tax homes in zero-tax states they rarely work in.

How long can I stay on one assignment?

Under 12 months in the same general area. After 12 months, the IRS considers it indefinite, and your tax home shifts to your assignment location.

What about per diem nurses?

The same tax home rules apply. If you're traveling for per diem work away from your permanent residence, you can claim tax-free stipends.

Do I need to file state taxes where I work temporarily?

Usually yes, as a non-resident, for income earned in that state. Check each state's requirements and file accordingly.

Final Thoughts

Maintaining a compliant tax home is essential for travel nurses who want to maximize income through tax-free stipends. The requirements—duplicate expenses, state ties, and regular returns—are straightforward but must be documented meticulously.

Key takeaways:

You must have a physical street address (not a P.O. Box)
Duplicate expenses must be actually paid and documented
Limit assignments in the same area to under 12 months
Return to your tax home periodically
Keep all receipts, leases, utility bills, and travel records

Ready to establish a compliant tax home? Your Tax Base provides everything you need: residential address, lease documentation, utility bills, and mail forwarding for as low as $14.99/month. Get started today.

Travel Nurse Tax Home Requirements Explained