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Tax Benefits for Travel Nurses

Tax benefits for travel nursesDid you know that as a travel nurse with RNnetwork, you’re entitled to tax benefits as well as the salary and perks we offer? The following information can help you know whether you currently qualify for tax benefits and, if you don’t, what you can do to take advantage of this program.

Permanent tax home

To be eligible for nontaxable travel benefits (housing costs or allowances, transporation and meal per diems), you must have a permanent tax home. If you don’t meet this requirement, your travel costs are considered taxable income, and all travel nursing benefits are subject to payroll tax witholding.

Complete the tax home representation form before starting each assignment, whenever there is a change in your tax home status and if you will exceed the one-year limitation. Keep the tax home determination worksheet (page 2 of the representation form) for your records.

Working outside commuting distance

The second requirement for receiving tax benefits is that your travel assignment must not be within commuting distance of your permanent tax home. A reasonable distance in rural areas might be 100 miles. RNnetwork’s conservative cutoff for commuting distance is 50 miles or two hours in an urban setting and 100 miles or 1.5 hours or more in a rural setting.

Additionally, the IRS only recognizes travel nurse benefits as nontaxable income if you are working “away from home” and defines that as taking assignments away from your tax home where sleep is necessary to meet work demands. Some guidelines also suggest that the workday and travel time last longer than an ordinary day’s work and require staying overnight.

In other words, if you stay in company-provided housing, that is evidence that you will not be returning to your tax home frequently during the workweek. If you have implied that you’ll return home more than occasionally during the workweek, you indicate that your tax home is within easy commuting distance — and you will not be eligible for nontaxable travel benefits.

Not working in the same general area more than a year

The final requirement for receiving nontaxable benefits is that each individual travel assignment, including extensions and other assignments, cannot be expected to keep you in the same general area (i.e., within commuting distance of your home) for more than one year.

If you stay on one assignment or take multiple assignments (including with other travel nurse companies) in the same area for more than a year, your travel benefits become taxable income as soon as you know you’ll exceed the one-year limit. This also applies if you extend an assignment and work longer than one year in that area.

Note: You do not have to classify travel expenses incurred before you knew you would exceed the one-year limit.

Your RNnetwork recruiter, with the help of the payroll and tax departments, monitors these rules and lets you know if you’ll become ineligible at any point, as these rules may be critical factors in deciding whether you accept an assignment or assignment extension.

For more information about tax requirements, check out our tax resources page.

About the author

Lindsay Wilcox

Lindsay Wilcox is a communication professional with experience writing for the healthcare and entertainment industries as well as local government. When she's not circling typos, she's enjoying fish tacos and hanging out with her family.

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