We talk a bit more about the travel nursing housing stipend in our 10 Things We’ve Learned about Travel Nursing video, but this topic definitely deserves it’s own post. As I’ve mentioned many times, the biggest financial advantage to travel nursing is the untaxed housing stipend. At the same time, the travel nursing stipend is one of the most confusing parts to travel nursing. In order to take full advantage of it, there are a lot of rules and limitations.

the financial advantage

Your pay as a travel nurse is split into two categories, regular hourly pay and a housing/living stipend.

Should I take the housing offered by my agency?

Sometimes, you can choose to take housing offered by your agency in exchange for the housing stipend, but this is rarely a good deal. Though we’ve heard a lot about it, we’ve actually never been offered housing from any of the agencies Dan has worked with. So far for us, the stiped has always worked out to be more than half of Dan’s total pay.

If you don’t take the agency-offered housing, you are responsible for finding your own, which definitely is a lot of work. Check out our tips on how to find housing while travel nursing. That said, the stiped should nearly always be plenty to cover housing and more.

Is the housing stipend really just for housing?

NO! There are often two types of travel reimbursements that companies offer to travelling employees/employees on work trips: flat rate and itemized. When it comes to travel nursing, sometimes there are travel bonuses offered by agencies to give a nurse some extra help getting from contract to contract. This may be flat rate or itemized, but the housing stipend for travel nurses is always flat rate. Theoretically, it’s calculated based on the cost of living in the area and expected living expenses for the travel nurse.

All that to say, you will not need to keep any receipts to send to your travel nurse agency to receive the housing stipend. Your agency will factor it into your pay with each paycheck and you can go on to use it for rent, food, gas, or whatever you want. That said, if you ever got audited it wouldn’t be a bad idea to have records of your rent payments. Travel nurses are prime targets for audits as so much of their income goes untaxed, so it’s a good idea to be prepared. As a travel nurse, it’s a good idea to keep records of all of your travel experiences also as you can get tax deductions for some of it.

Is the stipend based on how many hours I work?

Yes, and no.

The housing stipend is a flat rate added on top of your normal hourly pay that is per shift worked up to full time (three twelve hour shifts) per week. This may be calculated differently in your contract if you are set to work four eight hour shifts, or some other schedule variation. Check your contract to see exactly how the stipend is applied, but it is typically paid out per shift that you are contracted to work.

If you get sick and work only 24 of your contracted 36 hours, you not only lose your hourly pay for the day you miss, but also one third of your housing stipend. If you pick up overtime on top of your contracted hours, you will not receive any extra housing stipend for these shifts.

how to qualify for the stipend to be tax-free

If a travel nurse wants to receive their housing stipend tax free, they legally cannot stay in the same place for over a year. In addition, they must have a qualifying tax home (that most often can’t be in the same state as where they’re working as a travel nurse) at which they must spend at least 30 days a year.

you need to be duplicating your expenses with a tax home

If you establish what is called a tax home (basically a permanent residence) you can qualify to have this travel nursing stipend be tax-free. This means you will only pay taxes on your hourly pay so usually around half of your income. Sounds great, right? This also means that you will fall into a much lower income bracket, so the amount of income tax you do pay will be at a lower rate. This is SIGNIFICANT. Do your own research on what qualifies as a tax home, but essentially you need to own or rent a house/apartment/condo/room at fair market value as your permanent residence.

The idea is that you are duplicating your expenses when travel nursing so your second apartment (that you live in when you’re travel nursing away from your permanent residence) is essentially like a commuting expense that can be “reimbursed.” Like I said, you don’t actually have to send any kind of receipts or proof of the amount of rent you pay, your stipend will be a flat rate as defined within each contract. In order to “maintain” this residence as a legal tax home, you must stay there for at least 30 days of each calendar year.

geographic limitations of your tax home

If you are working within 60 minutes or 60 miles of your permanent residence/tax home, you will likely not qualify to receive the stipend, but you will qualify for a local hourly rate. The 60 minute/mile rule is a general estimate/trend, but check what your agency has to say about this – it can vary by facility as well. The local hourly rate is typically higher than the corresponding travel hourly rate, but it is all taxed. In a way it’s like the stipend just gets factored into your hourly pay, but it’s not necessarily the exact same amount.

The IRS is not clear with it’s rules on what can qualify as a travel assignment so you have to go off of your research, what your agency says, and what the hospital you’ll be working at says. Some hospitals won’t accept travel nurses who have a driver’s license in the state of the hospital, perhaps using that as an indicator of their tax home. Your tax home should be the state in which your driver’s license is from, your car registration, etc. Ideally, you should make sure you’re registered to vote in the town of your tax home as further proof to the IRS that you live there.

time restraints to contracts

In order to qualify for the housing stipend to be untaxed, you also may not work the same contract for more than one year. The IRS goes even further to say you may not work a travel nursing contract within the same “area” for more than a year within a 24 month rolling period. “Area” is not well-defined, but typically the 60 mile/60 minutes rule seems to apply. Again, check with your agency to see what their rules and interpretation of this is.

When you sign on to work with an agency (and annually), you sign an affidavit stating that you meet certain guidelines (based on the IRS’s rules) to qualify for housing stipend to be untaxed. In addition to this, the agency is basically testifying on your behalf that you qualify so follow whatever rules and requirements they lay out in order to qualify.

confused yet?

If you’re confused, know you’re not alone! So much of this is based on confusing (and unclear/undefined) statements made by the IRS and can always vary slightly from agency to agency. Do your research, talk to your agency, and pay attention when signing that affidavit. If you do that and follow the rules, you should be good to go and ready to get that tax-free travel nursing stipend!