How Can a Travel Nurse Receive a Tax-Free Housing Stipend?
Travel nurses enjoy flexibility, freedom of movement, and the excitement of new cities, states, and even countries. Many travel nurse agencies offer benefits for nurses who sign with them. Some of the benefits include:
- Covered moving expenses
- Reimbursement for living expenses
- Health insurance
- Retirement plans
Housing is one of the most significant concerns for a travel nurse. There are a few options available, and it depends on the company as to how accommodations are set up. Some companies provide the housing (i.e., apartment, duplex, etc.). Some companies offer a housing stipend, or a fixed amount of money each month to apply towards housing.
First, nurses need to be aware of where their "tax home" is, as stipends are tax-free if working away from the tax home. Having a tax home is necessary to receive tax-free housing. A "tax home" is defined as the general vicinity of an individual's primary place of work (regardless of where the primary residence is). Generally, the IRS considers someone traveling away from home (i.e., their "tax home") if it exceeds one work day.
This is essentially what travel nurses do take assignments for periods of time on a temporary basis. Different travel nurse agencies offer different stipends- it's important to research what the living expenses are in a specific area to ensure housing is adequately covered. The General Services Administration (GSA) lists the maximum daily amount for lodging, meals, and incidentals with regards to travel expenses. The key word is MAXIMUM. It's not required that a company pay employees the listed stipend. In fact, some travel nurse agencies offer higher hourly wages instead of housing stipends or offer lower amounts. Additionally, the GSA rates are based on short-term travel; usually less than a month. Travel nurse contracts can last three months or more.
Taking the housing stipend can be advantageous not only for tax purposes, but for financial gain as well. For example, if a travel nurse is allotted $2500 a month for housing but can secure a residence for $1200 a month, he or she can essentially pocket the rest. However, it's important to look at the entire contract. Some agencies reduce one part of a benefits package to increase another. For example, a high housing stipend may be paired with a lower wage or reduced benefits.
For detailed information on tax-free housing and other tax-related issues for travel nurses, the National Association of Travel Healthcare Organizations (NATHO) has a great FAQ section as a resource.