Tax Fact #1: Your tax home is what makes tax-free stipends possible
Your tax home is the foundation of nearly every travel nurse tax issue. It’s not automatically where your current contract is, and it’s not defined by where you’d like to live.
For travel nurses, a tax home is generally your main place of business or the area where you maintain a permanent home base while working temporary assignments elsewhere. The reason this matters is simple: tax-free stipends are only allowed because you’re considered to be working temporarily away from that tax home.
The IRS allows reimbursement for lodging and meals when you’re duplicating living expenses while working away from your home base. No tax home usually means no “away from home.” And without that, stipends are treated as taxable wages instead of tax-free reimbursements.
This hasn’t changed for 2025. Travel nurse tax home rules are still grounded in IRS Publication 463 and long-standing court cases. The IRS continues to look at whether your work is temporary and where your real financial base exists.
Think of the tax home as the anchor for travel nurse taxes. Everything else hangs off it.
Not sure if your tax home setup holds up?
Before signing your next contract, it can help to review your tax home and stipend structure with a professional who understands travel healthcare.
👉 Schedule a 15-minute Tax Home Checkup:
https://calendly.com/taxsmart/15min?month=2026-01
Tax Fact #2: You don’t just need a tax home, you need to be able to prove it
Having a tax home in your head isn’t enough. The IRS focuses on documentation, especially when tax-free stipends are involved.
When a return is reviewed, the question isn’t “Did you believe you had a tax home?” It’s “Can you show it?” Proof usually comes from ordinary, boring records: rent or mortgage payments, utility bills, insurance, driver’s license records, voter registration, and bank statements showing recurring expenses tied to one location.
You don’t need every document, but you do need a consistent, logical picture that shows you maintain a real home base. This is where many travel nurses run into trouble.
We see issues when nurses rely on informal arrangements. Living with family without paying fair-market rent. Using a friend’s address just for mail. Storing belongings somewhere but not maintaining an actual residence. Those setups often feel fine until the IRS asks for documentation and there’s nothing solid to support the claim.
There haven’t been new proof requirements added for 2025. The IRS is applying the same standards it always has. If your setup can’t be clearly explained with records, it’s vulnerable.
Tax Fact #3: Working in your home state doesn’t automatically disqualify tax-free stipends
This surprises a lot of people.
You can take assignments in your tax home state and still qualify for tax-free stipends. There’s no rule that says you have to cross state lines. What matters is whether the assignment is temporary and far enough away that daily commuting isn’t reasonable.
For example, a nurse living in California can take an assignment elsewhere in California and still meet the rules. The same applies in Texas, Florida, or any other state. State borders don’t decide this. Practical reality does.
The flip side is also true. Working out of state doesn’t automatically qualify you. If you give up your tax home or stop duplicating expenses, the assignment location doesn’t rescue the stipends. Out-of-state work with no real tax home is a common travel nurse audit issue.
State lines don’t do the heavy lifting. The facts do.
Tax Fact #4: The “50-mile rule” is a myth, not an IRS standard
There is no IRS 50-mile rule. It doesn’t appear in IRS Publication 463, the tax code, or any official guidance.
The idea came from staffing agency policies and hospitals trying to control labor costs. Over time, internal guidelines turned into “rules” through repetition, especially in travel nursing communities. And this “rules” has now become a well established urban myth.
The IRS doesn’t care about a specific mileage number. It looks at whether it would be reasonable to commute daily based on your situation. In rural areas, 40 miles might be unreasonable. In major metro areas, 60 miles might still be normal.
This is why relying on the so-called 50-mile rule can cause problems. Distance is part of the analysis, not the conclusion. That was true years ago and it’s still true for travel nurse taxes in 2025. Required rest and sleep is a more defensible position.
Tax Fact #5: Traveling full-time without a permanent home changes everything
Some travel nurses choose to live fully mobile. No lease. No mortgage. No fixed home base. That lifestyle can work well personally, but it has tax consequences.
If you don’t maintain a permanent home, you’re generally considered an itinerant worker for tax purposes. That means you don’t have a tax home. And without a tax home, there’s nowhere to be “away from.”
In that situation, housing and meal stipends are usually treated as taxable wages because there’s no duplication of expenses. This isn’t a punishment. It’s simply how the rules work.
Some nurses knowingly choose this route and plan for higher taxable income. Problems arise when people expect tax-free stipends while having no ongoing home costs. The IRS has continued applying this rule consistently, and it comes up frequently in audits.
My favorite example of this rule was a nurse, Timothy, who sold his house and moved back home with “Momma” but spent all his time “on assignment” living in a fifth-wheel. He thought he was pretty smart until the IRS slapped him with an assessment for over $70,000 in back taxes and penalties. Oops – the perils of saving a few dollars on his DIY tax return and listening to some facebook group chat on how to work the system.
Tax Fact #6: Tax-free stipends only work when you’re duplicating real expenses
Stipends aren’t tax-free just because they’re labeled that way on a pay stub.
They’re generally allowed because they reimburse you for actual living expenses while you maintain a tax home elsewhere. That means you must be paying for two sets of living expenses at the same time: one at your tax home and one near your assignment.
If one side of that equation disappears, the tax-free treatment usually does too.
The IRS often looks to federal per diem benchmarks, including GSA rates, when evaluating whether stipend amounts are reasonable. Agencies commonly use those rates when structuring pay packages. But matching a GSA rate alone doesn’t guarantee compliance. The underlying facts still control.
The math only works if the facts work.
Wondering if your stipends are structured correctly?
A quick contract and stipend review can help identify issues before they turn into taxable income or future notices.
👉 Book a 15-minute Stipend Strategy Call:
https://calendly.com/taxsmart/15min?month=2026-01
Tax Fact #7: Multi-state filing is normal for travel nurses, and mistakes add up fast
If you work in more than one state during the year, you’re usually dealing with multiple state tax returns. That’s normal for travel nurses and one of the most common sources of errors.
Each state has its own rules on residency, nonresident income, credits for taxes paid to other states, and income sourcing. Some states are aggressive. Some are more forgiving. None follow the same playbook.
The most common issues we see are unfiled nonresident returns, missed credits for taxes paid to another state, and incorrect residency classifications. These mistakes don’t always trigger immediate notices. Sometimes they surface years later, often when someone is trying to qualify for a loan or clean up older filings.
There hasn’t been a sweeping overhaul of the federal framework for 2025, but states continue refining how they enforce their own rules for mobile healthcare workers. Getting this right isn’t about perfection. It’s about consistency and awareness.
Need help navigating travel nurse taxes in 2025?
If these travel nurse tax facts raise questions about your specific setup, you’re not alone. Travel nurse taxes are nuanced, and small assumptions can have big consequences.
At Travel Nurse Tax Pro, we’ve specialized exclusively in travel nurse and mobile healthcare taxes for over 20 years. We help nurses protect tax-free stipends, handle multi-state filings correctly, and build documentation that holds up under IRS and state review.
If you want clarity without pressure, visit www.travelnursetaxpro.com or reach out for a straightforward conversation about your situation before tax season sneaks up.
👉 Schedule a 15-minute conversation here:
https://calendly.com/taxsmart/15min?month=2026-01
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