The #1 concept every travel nurse must understand: Tax Home
The entire travel nurse tax system revolves around one concept: your "tax home." According to IRS Publication 463, your tax home is your regular place of business or post of duty—the entire city or general area where your main place of business is located—regardless of where you maintain your family home.
Why does this matter? Because travel expenses (housing, meals, transportation) are only deductible or excludable from income when you are "traveling away from home." If you do not have a tax home, you are never "away from home"—you are simply always at work, and all your stipends become taxable income.
The three factors the IRS uses to determine your tax home
- You perform part of your business in the area of your main home and use that home for lodging while doing business in the area. In other words, you actually work assignments near your permanent home.
- Your main home is where you lived before you became a travel nurse, and you still have living expenses there because you have not abandoned it. You keep a room, pay rent or mortgage, and maintain utilities at your home base.
- You have not abandoned the area where both your historical place of lodging and your claimed main home are located; you have a member or members of your family living at your main home; or you often use that home for lodging. You return there between contracts, family lives there, or you regularly use it.
What travel nurses can (and cannot) deduct in 2026
The 2017 Tax Cuts and Jobs Act (TCJA) made a major change: it suspended all miscellaneous itemized deductions subject to the 2% floor, including unreimbursed employee business expenses, for tax years 2018 through 2025. This means most travel nurses cannot deduct work-related expenses on their personal tax returns during these years.
However, 2026 is a critical year: the TCJA provisions are scheduled to expire after December 31, 2025. Unless Congress extends them, miscellaneous itemized deductions (including employee business expenses) will return in 2026. This could be a significant benefit for travel nurses who incur substantial unreimbursed work expenses.
| Expense Type | 2018-2025 (TCJA) | 2026+ (if TCJA expires) | Notes |
|---|---|---|---|
| Housing stipend (accountable plan) | Tax-free | Tax-free | Must have tax home; excess reimbursements taxable |
| Meal stipend (per diem) | Tax-free (up to GSA rate) | Tax-free (up to GSA rate) | Excess over GSA rate is taxable |
| Travel to/from assignment | Not deductible (employee expense) | May be deductible again | Keep all receipts; only if TCJA expires |
| Uniforms and scrubs | Not deductible | May be deductible again | If not reimbursed by agency |
| Licensing and certification fees | Not deductible | May be deductible again | State RN license, BLS, ACLS |
| Continuing education | Not deductible | May be deductible again | CEUs required to maintain license |
| Nursing tools (stethoscope, etc.) | Not deductible | May be deductible again | If required for job and not reimbursed |
| Tax preparation fees | Not deductible | May be deductible again | Was subject to 2% floor pre-TCJA |
| Home office | Not deductible for employees | Not deductible for employees | Only self-employed can deduct |
| Student loan interest | Deductible (above-the-line, up to $2,500) | Deductible (above-the-line, up to $2,500) | Not affected by TCJA; income limits apply |
How tax-free stipends work (the accountable plan)
Most travel nurse agencies operate under an "accountable plan" for stipends. Under an accountable plan, reimbursements for business expenses (housing, meals, travel) are excluded from your taxable income if three conditions are met:
- Business connection: The expenses must have a business connection—you incurred them while performing services as an employee.
- Adequate accounting: You must adequately account to your employer for these expenses within a reasonable period of time. This typically means submitting timesheets and assignment details that show you are working away from your tax home.
- Returning excess reimbursements: You must return any excess reimbursement or allowance within a reasonable period of time. In practice, this means if your stipend exceeds your actual expenses, the excess should be returned—but most agencies structure stipends at or below the GSA per diem rate, so this rarely comes up.
The GSA per diem rates: What you need to know
The U.S. General Services Administration (GSA) publishes per diem rates for every county in the continental United States. These rates set the maximum amount the federal government will reimburse its employees for lodging and meals while traveling. While travel nurses are not federal employees, the GSA rates are widely used as a benchmark for what constitutes a "reasonable" tax-free stipend.
| Component | Standard Rate (2025-2026) | High-Cost Areas | Notes |
|---|---|---|---|
| Lodging (per night) | $98 | $100-$300+ | Varies by city; check GSA website |
| Meals & Incidentals (per day) | $59 | $69-$79 | Standard CONUS rate; higher in expensive cities |
| First/last day of travel | 75% of M&IE rate | 75% of M&IE rate | IRS rule for partial travel days |
You can look up the exact per diem rate for any assignment location at gsa.gov/perdiem. If your agency pays a housing stipend above the GSA lodging rate for that area, the excess is generally taxable. If it pays below the GSA rate, you cannot deduct the difference (under TCJA, employee expenses are not deductible).
Common travel nurse tax mistakes (and how to avoid them)
Mistake 1: Assuming all stipends are tax-free
This is the #1 mistake. Stipends are only tax-free if you have a tax home AND the agency operates under an accountable plan. If you are an itinerant (no tax home), all stipends are taxable. If your agency does not operate under an accountable plan (rare but possible), stipends are taxable.
Mistake 2: Not keeping records of your tax home
If the IRS audits you, you must prove you have a tax home. Keep: mortgage/rent statements for your permanent home, utility bills, drivers license with your home address, vehicle registration, bank statements showing you return home between assignments, and evidence that you work some assignments near your home.
Mistake 3: Taking consecutive assignments in the same area for more than 1 year
If you take an assignment (or consecutive assignments) in the same general area for more than 1 year, the IRS may treat that area as your new tax home. Once that happens, you are no longer "traveling away from home" and your stipends become taxable. The 1-year rule is strict: if you realistically expect the assignment to last more than 1 year, it is not temporary, and you cannot exclude stipends.
Mistake 4: Not filing taxes in multiple states
If you work in multiple states during the year, you may need to file state tax returns in each state where you earned income. Some states have reciprocity agreements, but many do not. You will generally file a resident return in your home state and non-resident returns in states where you worked. Your home state will usually give you a credit for taxes paid to other states, but you must file all required returns.
Mistake 5: Using a tax preparer who does not understand travel nursing
Travel nurse taxes are complex. A general tax preparer may not understand the tax home concept, accountable plans, multi-state filing, or the nuances of travel nurse compensation. Use a CPA or enrolled agent who specializes in travel healthcare workers. The cost ($300-$800 for a complex return) is worth it to avoid an audit or missed deductions.
2026 tax changes every travel nurse should watch
- TCJA expiration (potential): If Congress does not extend the TCJA provisions, miscellaneous itemized deductions (including unreimbursed employee business expenses) will return in 2026. This could allow travel nurses to deduct travel costs, uniforms, licensing, CE, and more—subject to the 2% AGI floor.
- Standard deduction changes: The TCJA roughly doubled the standard deduction. If it expires, the standard deduction will drop significantly, making itemized deductions more attractive for many travel nurses.
- State tax changes: Several states have considered or implemented changes to how travel nurses are taxed, particularly regarding stipends and multi-state filing. Check the rules in each state where you work.
- IRS enforcement: The IRS has increased enforcement on travel nurse compensation, particularly agencies that artificially inflate tax-free stipends. Expect more scrutiny in 2026 and beyond.