Travel Nurse Tax Questions Answered: Tax Home, Stipends & State Taxes

Last Updated: January 2026

Travel nursing offers incredible opportunities: competitive pay, flexible schedules, and the chance to explore new cities across the country. But with those benefits come complex tax questions that can significantly impact your take-home pay. Understanding travel nurse tax rules is essential to protecting your tax-free stipends and avoiding costly surprises at tax time.

This comprehensive FAQ guide answers the most common travel nurse tax questions, from establishing a tax home to understanding state tax obligations. Each answer is designed to give you clear, actionable information based on current IRS guidelines.

Table of Contents

• What is a tax home for travel nurses?
• What is the IRS 3-factor test for tax home?
• Can travel nurses use their parents' house as a tax home?
• Do travel nurses pay taxes in every state they work?
• Are travel nurse stipends taxable?
• How long can a travel nurse stay in one location?
• What happens if a travel nurse does not have a tax home?
• Can travel nurses deduct travel expenses?

What is a tax home for travel nurses?

A tax home is the city or general area where your main place of business or work is located, regardless of where you maintain your personal residence. For travel nurses, it is typically where you have regular employment or economic ties, not necessarily where you live full-time.

According to IRS Publication 463, your tax home is defined as "your regular place of business or post of duty, regardless of where you maintain your family home." This definition is critical because it determines whether your housing and meal stipends can be received tax-free.

The key distinction for travel nurses is understanding that your tax home and your personal residence can be different locations. For most workers, their tax home and personal home are the same place. But travel nurses who take temporary assignments in various cities need to maintain a separate, permanent tax home to qualify for tax-free reimbursements.

Why Your Tax Home Matters

Your tax home status directly impacts whether your stipends are taxable:

• With a valid tax home: Housing, meal, and incidental stipends are tax-free reimbursements for duplicate living expenses
• Without a valid tax home: All stipends become fully taxable W-2 wages subject to federal income tax, Social Security, Medicare, and state taxes

For a travel nurse receiving $25,000 annually in stipends, the difference between having and not having a tax home can mean $6,000-$10,000 in additional taxes. This makes establishing and maintaining a proper tax home one of the most important financial decisions for travel nurses.

The IRS examines whether you have a "regular place of business" and whether your assignments are truly "temporary" rather than "indefinite." If you have no regular place of business and no fixed residence, the IRS considers you an itinerant worker, and your tax home becomes wherever you happen to be working at the time.

Use our Travel Nurse Tax Calculator to estimate how your tax home status affects your total compensation.

What is the IRS 3-factor test for tax home?

The IRS 3-factor test evaluates whether you have a tax home based on: (1) whether you work in the same area regularly, (2) whether you have living expenses at a permanent residence that you duplicate while traveling, and (3) whether you have family or historical ties to the claimed tax home area.

When you do not have a regular or main place of business, the IRS applies this three-factor test from Publication 463 to determine your tax home location. Understanding each factor is essential for travel nurses who want to maintain tax-free stipend eligibility.

Factor 1: Business Activity in Your Main Home Area

This factor asks whether you perform part of your business in the area of your main home and use that home for lodging while doing business there. For travel nurses, this means:

• Working per diem or PRN shifts at hospitals near your permanent residence
• Taking occasional local assignments between travel contracts
• Maintaining an active nursing license and working at least periodically in your home state

Factor 2: Duplicate Living Expenses

This is often the most critical factor. You must have living expenses at your main home that you duplicate because your work requires you to be away. Qualifying duplicate expenses include:

• Rent or mortgage payments maintained while on assignment
• Utility bills (electricity, gas, water, internet)
• Property taxes and homeowner's insurance
• Documented payments to family members if staying with relatives

Factor 3: Personal and Family Ties

This factor examines whether you have abandoned the area where your main home is located. Strong ties include:

• Family members (spouse, children, dependents) living at your permanent address
• Frequent returns home between assignments
• Voter registration, vehicle registration, and driver's license
• Bank accounts, healthcare providers, and professional memberships in your home area

Critical requirement: You must satisfy at least two of these three factors to establish your permanent residence as your tax home. Meeting only one factor creates significant audit risk, and the IRS may classify you as an itinerant worker with no tax home.

Can travel nurses use their parents' house as a tax home?

Yes, travel nurses can potentially use their parents' house as a tax home, but only if they pay fair market rent, maintain the room exclusively for their use, and return there regularly between assignments. Simply listing a parent's address without genuine economic ties does not qualify.

Using a family home as your tax home is a common strategy for travel nurses, especially those early in their careers. However, the IRS scrutinizes these arrangements carefully, and improper setups can result in audits, back taxes, penalties, and interest.

Requirements for Using a Family Home

To legitimately use your parents' house (or another family member's home) as your tax home, you must:

• Pay fair market rent: Research what comparable rooms or apartments rent for in that area, and pay at or near that amount monthly
• Maintain exclusive use: The room or space should be yours alone, not used by other family members or guests when you're away
• Document payments: Use checks, bank transfers, or Venmo/PayPal with memos indicating "rent" payments, never cash without receipts
• Create a written lease: Have a formal rental agreement specifying the rent amount, what's included, and the rental period
• Return regularly: Visit between assignments and use the space as your genuine home base

What Counts as "Fair Market Rent"?

Fair market rent means what an unrelated person would pay for similar accommodations. For a bedroom in your parents' house, this might be $400-$800/month depending on location, or you might calculate a proportional share of the household expenses (rent/mortgage, utilities, insurance) based on square footage used.

Documentation the IRS May Request

• Cancelled checks or bank statements showing rent payments
• Written lease agreement signed by both parties
• Evidence that your parents report the rent as income (Form 1040, Schedule E)
• Photos showing your personal belongings at the residence
• Travel records showing visits between assignments

The Safe Approach vs. The Risky Approach

Safe approach: Pay documented fair market rent monthly, keep personal items at the residence, visit regularly, have a written lease, and ensure your parents report rental income on their taxes.

Risky approach: Use your parents' address for mail only, pay no rent or token amounts, never visit, and have no written agreement. This arrangement is likely to fail an IRS audit.

Learn more about establishing a proper tax home in our Complete Travel Nurse Tax Home Guide.

Do travel nurses pay taxes in every state they work?

Generally yes, travel nurses must file and potentially pay income taxes in every state where they work and earn income. However, states without income tax (like Florida and Texas) have no filing requirement, and your home state may offer credits for taxes paid to other states.

State taxes add complexity to travel nursing because each assignment location may create a filing obligation. Understanding which states tax your income and how credits work can help you minimize your overall tax burden through strategic assignment selection.

States With No Income Tax

Nine states do not impose state income tax on wages, making them attractive destinations for travel assignments and domicile:

• Florida: No income tax, great weather, and travel-nurse friendly infrastructure with major hospital systems throughout the state
• Texas: No income tax, large healthcare market
• Nevada: No income tax
• Washington: No income tax (but has capital gains tax)
• Wyoming: No income tax
• Alaska: No income tax
• South Dakota: No income tax
• Tennessee: No income tax on wages
• New Hampshire: No income tax on wages

Strategic tip: Many travel nurses establish domicile in Florida specifically because it combines zero state income tax with excellent infrastructure, warm weather year-round, affordable cost of living compared to other coastal states, and no requirement to actually live there full-time. Florida also has no inheritance tax and strong asset protection laws, making it the gold standard for tax-conscious travel nurses. With world-class beaches, diverse cities from Miami to Tampa to Jacksonville, and healthcare facilities always seeking travel nurses, Florida offers the complete package.

Reciprocity Agreements

Some states have reciprocity agreements that allow residents of one state to work in another without paying taxes to the work state. For example:

• Pennsylvania and New Jersey have reciprocity
• Virginia has agreements with DC, Maryland, West Virginia, and others
• Illinois and Iowa have reciprocity

With reciprocity, you only pay taxes to your home state, simplifying filing requirements.

Tax Credits for Multi-State Filers

If you pay income tax to a state where you worked, your home state typically provides a credit for those taxes to prevent double taxation. The credit equals the lesser of:

• The actual tax paid to the other state, OR
• The tax your home state would charge on that same income

Aggressive Tax States to Watch

California: Claims tax on all income if you're a resident, even if earned elsewhere. Aggressively audits departing high-income residents. California's top rate of 13.3% makes it one of the most expensive states for travel nurses who maintain residency there.

New York: Similar to California, with a 10.9% top rate. Closely monitors residency changes and aggressively pursues those who claim to have left.

By establishing domicile in a zero-tax state like Florida and taking strategic assignments, you can significantly reduce your state tax burden. Florida's combination of no income tax, no estate tax, and homestead protections makes it the premier choice for travel nurses seeking to maximize their take-home pay. Learn more with our Florida Domicile Guide.

Are travel nurse stipends taxable?

Travel nurse stipends for housing and meals are tax-free only if you maintain a legitimate tax home and incur duplicate living expenses while on assignment. If you do not have a valid tax home, your stipends become fully taxable income.

This is one of the most misunderstood aspects of travel nursing compensation. Many nurses assume their stipends are automatically tax-free, but the IRS has specific requirements that must be met. Your travel nursing agency does not verify your tax home status, so the responsibility falls entirely on you.

Conditions for Tax-Free Stipends

To receive stipends tax-free, you must:

• Maintain a legitimate tax home: Meet at least 2 of 3 factors in the IRS test
• Incur duplicate living expenses: Pay for housing at your permanent residence while also paying for temporary housing at your assignment
• Work temporary assignments: Each assignment must be expected to last 12 months or less
• Be "away from home" for work: Your assignment must be far enough that you cannot reasonably commute daily

Financial Impact: Tax-Free vs. Taxable Stipends

Here is an example showing the tax difference:

Scenario	Amount
Annual housing and meal stipends	$25,000
Federal income tax (22% bracket)	$5,500
Social Security + Medicare (7.65%)	$1,912
State income tax (5% average)	$1,250
Total additional taxes if stipends are taxable	$8,662

Note: If you're domiciled in Florida, you eliminate that $1,250 state tax portion entirely, saving an additional $1,000+ per year compared to nurses domiciled in income-tax states. This is just one more reason why Florida domicile is so popular among travel nurses.

Agency Responsibility vs. Your Responsibility

Your agency does NOT verify your tax home. Agencies offer stipends based on your stated tax home address and assume you meet IRS requirements. If you're audited and found to lack a valid tax home, you (not your agency) owe back taxes, penalties, and interest.

Calculate your true tax situation with our Travel Nurse Tax Calculator.

How long can a travel nurse stay in one location?

The IRS generally considers employment lasting more than one year in a single location to be indefinite rather than temporary. After 12 months in one area, you may lose your tax home status and your stipends could become taxable.

The 12-month rule is one of the most important timing considerations for travel nurses. Exceeding this limit in any single metropolitan area can have serious tax consequences.

The 12-Month Rule Explained

According to IRS Publication 463: "If you expect employment at a work location to last for 1 year or less, it is temporary unless facts and circumstances indicate otherwise. Employment at a work location that lasts for more than 1 year is indefinite."

Key points:

• Temporary (12 months or less): Tax home remains at your permanent residence; stipends are tax-free
• Indefinite (more than 12 months): Assignment location becomes your tax home; stipends become taxable
• The clock is rolling: The IRS looks at any 24-month period, not just calendar years

When Does the Clock Reset?

The 12-month clock can reset if you have a significant break from working in that area. Generally, leaving for 7 or more months before returning may reset the clock, but this is a gray area. The safest approach is to avoid returning to the same metropolitan area if you're approaching the 12-month limit.

Metropolitan Area Definition

The IRS considers the "entire city or general area" as one location. Working at different hospitals within the same commuting zone (like different facilities in the San Francisco Bay Area) counts as the same location for the 12-month rule.

Expected vs. Actual Duration

The determination is based on your realistic expectations when you start the assignment. If you genuinely expect to stay less than 12 months but circumstances change and you extend, the assignment may convert from temporary to indefinite. Consult a tax professional if your situation changes.

What happens if a travel nurse does not have a tax home?

A travel nurse without a valid tax home is considered an "itinerant" worker by the IRS. This means all housing and meal stipends become fully taxable income, potentially adding thousands of dollars to your tax bill.

Itinerant status is more common than many travel nurses realize. If you sold your home, gave up your apartment, put belongings in storage without maintaining a residence, and travel continuously without a permanent base, you may be an itinerant worker in the eyes of the IRS.

IRS Definition of Itinerant

The IRS states in Publication 463: "If you have no regular place of business or post of duty and there is no place where you regularly live, your tax home is wherever you work."

This means:

• Your tax home moves with each assignment
• You are never "away from home" for tax purposes
• All reimbursements for housing, meals, and travel are taxable wages

The Financial Impact

Here's a realistic calculation for an itinerant travel nurse earning $90,000 in W-2 wages plus $25,000 in stipends:

Tax Impact	With Tax Home	Itinerant (No Tax Home)
Taxable income	$90,000	$115,000
Additional federal taxes	$0	$5,500
Additional FICA taxes	$0	$1,912
State taxes (if not FL domicile)	$0	$1,250
Annual cost of itinerant status	$0	$8,662+

How to Fix Itinerant Status

If you realize you may be an itinerant, you can establish a tax home by:

• Renting an apartment or room that you maintain continuously
• Returning to a specific location between assignments
• Establishing documented ties (lease, utilities, work in the area)
• Considering Florida domicile to maximize tax benefits while establishing your permanent base. Florida offers the perfect combination: no state income tax, affordable living costs, excellent healthcare job market, and year-round warm weather. Many travel nurses use Florida as their domicile state while maintaining their tax home elsewhere.

Audit Risk for Itinerants Claiming Tax-Free Stipends

If you are technically an itinerant but have been receiving tax-free stipends, you face audit risk. The IRS can assess back taxes for prior years plus penalties (typically 20-25% accuracy-related penalty) and interest. Consider consulting a tax professional to evaluate your situation and correct it going forward.

Can travel nurses deduct travel expenses?

Since the Tax Cuts and Jobs Act of 2017, W-2 travel nurses cannot deduct unreimbursed travel expenses on their federal tax returns. These deductions were eliminated for employees through 2025 (extended in some provisions). However, travel nurses who work as independent contractors (1099) may still claim these deductions.

This is an important change that many travel nurses are not aware of. Prior to 2018, employees could deduct unreimbursed business expenses as itemized deductions on Schedule A. The Tax Cuts and Jobs Act (TCJA) suspended this deduction for tax years 2018-2025.

The 2017 Tax Law Change

Before 2018, W-2 employees could deduct:

• Unreimbursed mileage and transportation costs
• Uniforms and scrubs required for work
• Continuing education and license fees
• Professional dues and subscriptions
• Work-related cell phone expenses

These deductions were subject to a 2% of AGI floor, meaning only amounts exceeding 2% of adjusted gross income were deductible. The TCJA eliminated this category entirely for W-2 employees.

W-2 vs. 1099 Travel Nurses

W-2 employees: Cannot deduct unreimbursed travel expenses federally. Your agency should reimburse these costs through stipends or direct payments.

1099 independent contractors: Can still deduct ordinary and necessary business expenses on Schedule C, including:

• Housing costs at assignment locations
• Travel to and from assignments
• Meals while on assignment (50% deductible)
• Licensing fees and continuing education
• Professional liability insurance

State-Level Deductions

Some states did not conform to the federal TCJA changes and still allow employee business expense deductions on state returns. These states include:

• California
• New York
• Pennsylvania
• Minnesota
• Hawaii

However, if you're domiciled in Florida (which has no income tax), this state-level deduction opportunity is irrelevant since you have no state return to itemize on. The zero state income tax benefit in Florida far outweighs any potential deduction savings in high-tax states. For example, if you earned $100,000 and could deduct $3,000 in expenses in California, you'd save roughly $300 in state taxes. But the same $100,000 earned with Florida domicile saves you $9,300+ in California state taxes. The choice is clear.

Conclusion: Protecting Your Travel Nurse Tax Benefits

Travel nurse taxes are complex, and many nurses unknowingly put themselves at risk by failing to maintain a proper tax home, exceeding the 12-month rule, or misunderstanding stipend taxation. The difference between doing it right and doing it wrong can cost you $6,000-$15,000 or more per year.

The key takeaways for protecting your tax benefits:

• Establish and maintain a legitimate tax home with documented duplicate expenses
• Meet at least 2 of 3 IRS factors for tax home determination
• Track your time carefully to avoid exceeding 12 months in any single location
• Keep thorough documentation including leases, rent receipts, utility bills, and travel records
• Consider Florida domicile to eliminate state income taxes and maximize your take-home pay

Given the complexity of travel nurse taxation, we strongly recommend consulting with a tax professional who specializes in travel nurse taxes. They can evaluate your specific situation, help you establish proper documentation, and ensure you're complying with IRS requirements while maximizing your tax-free benefits.

How Your Tax Base Can Help

Your Tax Base specializes in helping travel nurses establish Florida domicile for state tax savings. Florida stands out as the premier destination for travel nurses seeking tax optimization because it offers:

• Zero state income tax on wages, investment income, and retirement distributions
• No estate or inheritance tax for long-term wealth protection
• Strong asset protection laws including unlimited homestead exemption
• Year-round warm weather and hundreds of miles of beautiful beaches
• World-class healthcare facilities with constant demand for travel nurses
• Lower cost of living than California, New York, or other high-tax coastal states

Our services include:

• Florida residential address (non-CMRA) for domicile documentation
• Lease agreements and occupancy documentation
• Virtual mailbox with mail forwarding nationwide
• Declaration of Domicile filing assistance

By establishing Florida as your domicile state, you join thousands of travel nurses who have discovered the tax advantages of calling the Sunshine State home. Combined with a properly maintained federal tax home for stipend purposes, you can maximize your take-home pay while staying fully compliant with IRS requirements.

Use our Travel Nurse Tax Calculator to see how much you could save with proper tax planning. Contact us today to learn how Florida domicile can benefit your travel nursing career.

Sources & References

IRS Publications

• IRS Publication 463: Travel, Gift, and Car Expenses (irs.gov/pub/irs-pdf/p463.pdf) - Primary source for tax home definition and the 3-factor test
• IRS Topic No. 511: Business Travel Expenses - Overview of deductible travel expenses and tax home requirements
• IRS Publication 17: Your Federal Income Tax - General federal tax guidance for individuals
• IRS Publication 525: Taxable and Nontaxable Income - Guidance on when reimbursements are taxable

IRS Revenue Rulings & Guidance

• Revenue Ruling 73-529: Establishes criteria for itinerant worker classification when no regular place of business exists
• Revenue Ruling 99-7: Clarifies tax home determination for workers with multiple work locations
• Revenue Ruling 93-86: Addresses temporary vs. indefinite assignment determination and the 12-month rule
• Tax Cuts and Jobs Act (TCJA) of 2017 - Eliminated unreimbursed employee expense deductions

Per Diem & Reimbursement Rates

• GSA Per Diem Rates (gsa.gov) - Federal per diem rates for lodging and meals by location
• GSA Per Diem Rate Lookup Tool - Search rates by city and state

State Tax Authority Resources

• Florida Department of Revenue - Confirms Florida has no state income tax on wages or personal income
• Texas Comptroller of Public Accounts - Confirms Texas has no state income tax
• California FTB Publication 1031: Guidelines for Determining Resident Status - California residency rules and audit factors
• New York DTF: Nonresident FAQs - New York nonresident filing requirements

Additional Resources

• IRS Accuracy-Related Penalty Guidelines - Penalty information for tax understatement
• IRS: Independent Contractor vs. Employee - W-2 vs. 1099 classification guidance

Sources & Methodology: This article synthesizes guidance from IRS Publications 463, 17, and 525, IRS Revenue Rulings 73-529, 99-7, and 93-86, GSA per diem rate schedules, state tax authority publications, and professional practice experience with travel nurse taxation. All citations reference publicly available IRS and government sources. Individual circumstances vary, and specific tax situations should be reviewed with qualified tax professionals.