Travel Nurses & The Tax Code
The tax code can be complicated for anyone to understand. It becomes increasingly complicated when a job includes travel for work. Travel nurses are a specific field of work that the tax code has changed to accommodate over the years. It is important to ensure that travel nurses understand the guidelines when it comes to their taxes. 2018 tax laws prevented travel nurses from deducting travel expenses on their taxes (Walker, Angelia). However, there are still tax advantages as a travel nurse. The guidelines just need to be understood and followed.
Travel nurses still receive a taxable base. These are standardized bill rates that are set through the hospital or contract company that the nurse is working for. Normally travel nurses receive a standard W2 for these contracts but they also often receive stipends for meals and housing. Travel nurses must have what the IRS calls a “tax home” in order to not be taxed on stipends that they receive. A tax home is essentially the city where you live or where “your main place of business is located” (“Foreign Earned Income Exclusion”). Most travel nurses can meet this qualification by visiting their primary residence “at least once every 12 months and can prove that you are paying for expenses to maintain your primary home.” (Brusie, Chaunie) If you cannot prove this or do not meet the qualifications, then it is the nurses’ responsibility to pay taxes on the stipends that they have received. Contractors that issue these stipends out are not responsible for seeing if each individual qualifies for non-taxable income. A few suggestions from travel nurses to ensure that you maintain your eligible tax home is:
Keeping proof of any payments that are made to show that someone else is maintaining your primary residence
Keeping your driver’s license and voter registration in your home state
Keeping your vehicle registered in your home state, and filing a Residence Tax Return with your home state (Brusie, Chaunie)
If you are a travel nurse and have further questions then feel free to reach out to info@frostcpas.com. We appreciate our nurses!
By: Katlyn Richardson, Onboarding Specialist at CROFT & FROST
Sources:
Brusie, Chaunie. “Travel Nurse Tax Guide 2022.” Travel Nursing, 8 Mar. 2021, https://www.travelnursing.org/travel-nurse-taxes-comprehensive-guide/.
“Foreign Earned Income Exclusion - Tax Home in Foreign Country.” Internal Revenue Service, 15 Sept. 2021, https://www.irs.gov/individuals/international-taxpayers/foreign-earned-income-exclusion-tax-home-in-foreign-country#:~:text=Your%20tax%20home%20is%20the,employee%20or%20self%2Demployed%20individual.
Walker, Angelina. “How Trump's Tax Plan Affects Travel Nurses in 2019.” Nurse.org, 1 Jan. 2018, https://nurse.org/articles/how-does-new-2018-tax-plan-affect-travel-nurses/.