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How Tax-Free Travel Nursing Benefits Could Be Yours

There’s an old saying that “only two things in life are certain – death, and   taxes.” But who says you can’t earn a good living and not have to see all, or most of it taxed? There are certain advantages to working through a travel nursing agency, among them are some tax-free travel nursing benefits.

You most likely take on travel nursing positions because you love caring for people and, lets face it, you are also really interested in visiting new cities and meeting new people. But you’re also in it to earn a living and would prefer to keep as much of your hard-earned cash as possible. Through what’s known as a “tax advantage plan” where certain expenses you encounter while working away from home are either tax deductible or are non-taxable, you can maximize your earnings.

To Qualify

In order to qualify for these low tax or tax-free travel nursing benefits however, you must maintain what’s known as an IRS tax home. If you’re maintaining an IRS tax home, your lodging, housing stipends, and travel reimbursements qualify for special tax status. If you do not have a permanent home, you are considered an itinerant worker and your stipends and reimbursements are taxed at your full rate- per -earnings.

By strict definition, maintaining a tax home means that you have a ‘permanent’ residence and job in your home town, but you occasionally travel to work elsewhere. The assumption is that you will return to your home to work in between those assignments. Since travel nursing jobs typically fall under a specialized scenario, where the majority of people in the field work multiple temporary assignments in various locations, the rules are a bit different. The IRS will determine if you have a “regular place of abode in a real and substantial sense.” While this definition is quite subjective, they look for 3 factors:

  • Does the taxpayer perform a portion of their business in the vicinity of the declared tax home and use that home for lodging while conducting business in the area. That area is usually defined as being within a 50 mile radius.
  • Are the taxpayer’s expenses duplicated as a result of traveling for work (meals, lodging, transportation).
  • That the taxpayer has not abandoned the tax home, which is determined by frequency of use and whether or not there are direct family members living in the home.

If you on only meet two of the three requirements, a more subjective facts- and -circumstances test is applied. If you only meet one, then you are considered an itinerant worker.

What You Get

Once it’s determined that you qualify for tax-free benefits it’s time to examine what you’ll get when negotiating your contract. Some travel nursing benefits that fall under the “tax advantage plan” come in the form of stipends or reimbursements for meals and incidentals like parking or cab fare. Other benefits include travel or “moving” expenses and lodging costs. Different agencies will negotiate varying rates for these items, so do your research and determine which ones offer the most substantial amounts for these benefits – don’t simply focus on the taxable pay rate.

You will want to check with your travel nursing agency about whether your advertised pay is a blended rate. This is when your hourly taxable wage is combined with the amount for your non-taxable reimbursements and stipends.

When negotiating a contract with a travel nursing agency, make sure you are clear about the portion of your overall pay that is tax-free or tax deductible. A higher amount of tax-free “earnings” are quite enticing if you are looking to save more money in the near term. However, if you are looking to qualify for a loan, your taxable rate is what the banks will consider.

If you’d like to work with an agency that not only provides some of the most desirable national and international locations, but also one that is known for offering the best benefits in the industry, contact us today and see what wonderful assignments await you.

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