# Tax deductions for nurses: what a W-2 nurse can still claim and what a 1099 nurse keeps

[Home](/) / [Tax document checklists](/checklists/tax-documents) / Tax deductions for nurses

By [Arthur Teboul](/authors/arthur-teboul), Founder, DokuTrak. Published 2026-10-31, updated 2026-10-31.

> **In brief:** Tax deductions for nurses depend on how you are paid. A W-2 staff nurse cannot deduct scrubs, shoes or license fees on the federal return, but can use the overtime deduction and education credits, while a 1099 contract nurse deducts work costs on Schedule C.

## The checklist: Nurse tax records: staff (W-2) and contract (1099) shifts

**Not advice.** This page is general information, not tax, legal or HR advice. Rules change: check the cited source and ask your own professional before you rely on it. Last reviewed October 25, 2026.

Tick the W-2 group if you are on staff and the 1099 group if you take contract or per-diem work; many nurses need both. The last group applies to everyone.

### Staff nurse (W-2) pay records

- [ ] Form W-2 from each hospital, clinic or staffing agency: Copy B and Copy 2 for the tax year; one per employer, even for a few shifts
- [ ] Final pay stub of the year showing overtime hours, rates and shift differentials: For 2025 returns, when the W-2 does not show the overtime premium
- [ ] Employer statement of qualified overtime for 2025, if posted: From 2026, read W-2 box 12 code TT instead; ask for a W-2c if it is wrong
- [ ] Reimbursement statements for uniforms, licenses or CEUs: Amounts paid back under an accountable plan stay out of wages
- [ ] Uniform, shoe and license receipts kept for the state return: Only if your state still allows employee costs; not used federally
- [ ] Form 2106 travel records, Armed Forces reservist nurses only: Reserve duty travel more than 100 miles from home

### Contract and per-diem nurse (1099) records

- [ ] Form 1099-NEC from each agency or facility that paid you as a contractor: Compare with your own invoice log; report all pay even without a form
- [ ] Agency or facility contracts for the year: Show contractor status, rates and any stipends
- [ ] License fees for each state and compact license, BLS, ACLS, PALS: Board invoices or card statements with the payment date
- [ ] Scrubs, nursing shoes, stethoscope and small equipment receipts: Itemized receipts, not only the card total
- [ ] Mileage log for trips between patient homes or facilities: Date, from, to, miles; leave out home to a single regular site
- [ ] Malpractice insurance policy and premium receipts: The declarations page and proof of payment
- [ ] Self-employed health premiums, SEP-IRA or solo 401(k) statements: Year-end statements from the insurer and the plan custodian
- [ ] Form 1040-ES estimated tax payment confirmations: Date and amount of each quarterly payment, federal and state

### School, CEUs and student loans

- [ ] Form 1098-T from each college for BSN, MSN or certificate courses: Box 1 payments and box 5 scholarships; feeds Form 8863
- [ ] Form 1098-E from each student loan servicer: Interest paid in the tax year
- [ ] Employer tuition assistance letter: Amount paid under the educational assistance program
- [ ] CEU course and conference receipts: Course name, date, provider and amount paid

### Family, benefits and prior year

- [ ] Child care provider name, address and SSN or EIN, with amounts paid: Form W-10 or the provider’s invoice; feeds Form 2441
- [ ] Form 1099-SA and Form 5498-SA for an HSA: Sent by the HSA custodian; contributions also show in W-2 box 12
- [ ] Last year’s federal and state returns: For carryovers, the prior Schedule C and depreciation
- [ ] Bank statements for the account where agency pay lands: To match 1099-NEC totals against deposits

Download: [PDF](https://dokutrak.com/downloads/pseo-v2/f1-tax-document-checklists/nurses.pdf) · [Word](https://dokutrak.com/downloads/pseo-v2/f1-tax-document-checklists/nurses.docx) · [Excel tracker](https://dokutrak.com/downloads/pseo-v2/f1-tax-document-checklists/nurses.xlsx)

## Tax deductions for nurses start with one question: W-2 or 1099?

Look at the form each payer sends before you collect a single receipt. A **staff nurse** is an employee of the hospital, clinic or agency, and gets a Form W-2. A **contract nurse** is paid as a business, and gets a Form 1099-NEC instead. Many nurses are both in one year, for example a staff job plus per-diem shifts through an agency.

The split matters because the two kinds of pay follow different rules. Here, **an unreimbursed employee expense** is a work cost your employer did not pay back, such as scrubs, a stethoscope or a renewal fee. A staff nurse lost them in 2018, when the code stopped allowing miscellaneous itemized deductions, and the 2025 law made that loss permanent ([26 U.S.C. 67](https://www.law.cornell.edu/uscode/text/26/67)).

The IRS keeps a short list of employees who can still deduct their own work costs. It covers Armed Forces reservists, qualified performing artists, fee-basis officials and people with impairment-related work costs ([IRS Publication 529](https://www.irs.gov/publications/p529)). A staff nurse fits only if one of those applies, such as a nurse in the Army Reserve.

| Cost | W-2 staff nurse | 1099 contract nurse |
| --- | --- | --- |
| Scrubs, nursing shoes, stethoscope | Not deductible on the federal return ([26 U.S.C. 67](https://www.law.cornell.edu/uscode/text/26/67)) | Business expense on Schedule C ([IRS Publication 334](https://www.irs.gov/publications/p334)) |
| State license, BLS, ACLS, PALS renewals | Not deductible on the federal return | Business expense on Schedule C |
| Continuing education to keep current skills | Education credit may apply ([IRS Publication 970](https://www.irs.gov/publications/p970)) | Business expense, or an education credit |
| Driving between facilities on one day | Not deductible on the federal return | Deductible; home to a single regular site is commuting ([IRS Publication 334](https://www.irs.gov/publications/p334)) |
| Overtime premium paid by the hour | New deduction from 2025 ([IRS, new deductions for workers and seniors](https://www.irs.gov/newsroom/one-big-beautiful-bill-act-tax-deductions-for-working-americans-and-seniors)) | Generally does not apply: it follows FLSA employee status ([IRS FS-2026-13, overtime deduction FAQs](https://www.irs.gov/pub/taxpros/fs-2026-13.pdf)) |

## The overtime deduction: the new break for hourly nurses

For tax years 2025 through 2028, you can deduct qualified overtime pay ([IRS, new deductions for workers and seniors](https://www.irs.gov/newsroom/one-big-beautiful-bill-act-tax-deductions-for-working-americans-and-seniors)). It covers only the premium part required by section 7 of the Fair Labor Standards Act, such as the "half" in time-and-a-half ([IRS FS-2026-13, overtime deduction FAQs](https://www.irs.gov/pub/taxpros/fs-2026-13.pdf)). If your hospital pays double time for a holiday shift, only the half that the law requires still counts ([IRS FS-2026-13, overtime deduction FAQs](https://www.irs.gov/pub/taxpros/fs-2026-13.pdf)).

Hospitals add a twist. Some figure overtime under a special FLSA rule for health care instead of the usual 40-hour week, and then the premium the hospital actually pays under that rule is what counts ([IRS FS-2026-13, overtime deduction FAQs](https://www.irs.gov/pub/taxpros/fs-2026-13.pdf)). Your pay stub shows which method payroll uses.

The deduction stops at $12,500 for a single nurse, or $25,000 on a joint return, and phases down when modified AGI tops $150,000, or $300,000 jointly ([IRS FS-2026-13, overtime deduction FAQs](https://www.irs.gov/pub/taxpros/fs-2026-13.pdf)). You can take it whether you itemize or not ([IRS, new deductions for workers and seniors](https://www.irs.gov/newsroom/one-big-beautiful-bill-act-tax-deductions-for-working-americans-and-seniors)). A married nurse must file jointly, and each spouse who earned the overtime needs an SSN valid for work ([IRS FS-2026-13, overtime deduction FAQs](https://www.irs.gov/pub/taxpros/fs-2026-13.pdf)).

Your W-2 now does the work. For tax years after 2025, only the amount your employer puts in box 12 of Form W-2 with code TT can be deducted ([IRS FS-2026-13, overtime deduction FAQs](https://www.irs.gov/pub/taxpros/fs-2026-13.pdf)). If an agency leaves it out, ask for a Form W-2c, because your own pay stubs cannot stand in for it ([IRS FS-2026-13, overtime deduction FAQs](https://www.irs.gov/pub/taxpros/fs-2026-13.pdf)). Your 2025 return escaped that rule under Notice 2025-69, so keep the last pay stub and any overtime statement the hospital posted ([IRS FS-2026-13, overtime deduction FAQs](https://www.irs.gov/pub/taxpros/fs-2026-13.pdf)).

One check before you count on it: a salaried nurse manager or educator may fall under the FLSA exemption for professional or executive staff. Overtime paid to an exempt employee does not qualify ([IRS FS-2026-13, overtime deduction FAQs](https://www.irs.gov/pub/taxpros/fs-2026-13.pdf)). Ask HR how your position is classified.

## Contract, per-diem and agency nurses: what goes on Schedule C

A nurse paid on Form 1099-NEC runs a small business, even with one client. You file Schedule C, and you owe self-employment tax once net earnings reach $400 ([IRS Publication 334](https://www.irs.gov/publications/p334)). In turn, your work costs become business expenses if they are ordinary and necessary in nursing ([IRS Publication 334](https://www.irs.gov/publications/p334)).

Keep proof for each cost on the day you pay it. That means the receipt for scrubs and shoes, the board invoice for each state license, and the course receipt for each certification. Malpractice insurance you buy for yourself belongs on the list too.

Car costs need a log. Driving from one patient home to the next, or between two facilities in a day, is deductible business travel ([IRS Publication 334](https://www.irs.gov/publications/p334)). Driving from home to the one hospital where you always work is commuting, and the IRS says it is personal ([IRS Publication 334](https://www.irs.gov/publications/p334)). Write the date, the start and end points and the miles for each trip.

Agency contracts belong in the file as well. They show whether the agency treats you as an employee or a contractor, and that sets the form you get. Long assignments far from home add tax home and stipend records, covered in the travel nurse checklist.

## Degrees, CEUs and student loans

School costs help nurses on either form. The lifetime learning credit is worth up to $2,000 a return for 2025, and it can cover courses that build job skills ([IRS Publication 970](https://www.irs.gov/publications/p970)). The American opportunity credit is worth up to $2,500 per eligible student for 2025, for the early years of a degree ([IRS Publication 970](https://www.irs.gov/publications/p970)). Both credits need Form 1098-T from the school.

For example, an RN in an online BSN program gets Form 1098-T from the university and claims the credit on Form 8863. If your employer pays tuition through an educational assistance program, you can exclude up to $5,250 of it each year ([IRS Publication 970](https://www.irs.gov/publications/p970)). Keep the employer letter that shows the amount paid.

Student loan interest is a separate line. You can deduct up to $2,500 of it, reported to you on Form 1098-E ([IRS Publication 970](https://www.irs.gov/publications/p970)). For 2025 the deduction phases out between $85,000 and $100,000 of MAGI, or $170,000 to $200,000 on a joint return ([IRS Publication 970](https://www.irs.gov/publications/p970)).

## Shift work, child care and pre-tax benefits

Night and weekend shifts often mean paid child care. The care can qualify for the dependent care credit on Form 2441 when it lets you work. For each provider, you report a name, address and SSN or EIN, and Form W-10 is the usual way to ask for it ([Form 2441 instructions](https://www.irs.gov/instructions/i2441)).

Your W-2 also carries numbers your preparer needs. One box shows retirement plan deferrals and HSA contributions, and another shows dependent care benefits. If you used an HSA, the custodian sends Form 1099-SA for what you spent.

Some states still let a nurse deduct employee costs that the federal return bars. Rules differ by state, so keep the uniform and license receipts even as a W-2 nurse until your preparer confirms. The [W-2 guide](/documents/w-2) shows which boxes to check for each item.

## Questions people ask

### What can nurses write off on taxes?

A 1099 contract nurse writes off ordinary and necessary costs such as scrubs, licenses and travel between sites on Schedule C ([IRS Publication 334](https://www.irs.gov/publications/p334)). A W-2 staff nurse cannot deduct those costs on the federal return ([26 U.S.C. 67](https://www.law.cornell.edu/uscode/text/26/67)), but can claim the overtime deduction and education credits.

### Can a W-2 nurse deduct scrubs, shoes or license renewals?

Not on the federal return. Scrubs and renewals a hospital does not pay back are employee costs, which the code has refused since 2018 and now refuses for good ([26 U.S.C. 67](https://www.law.cornell.edu/uscode/text/26/67)). Ask your employer to reimburse them, and check whether your state return allows them.

### Is the employee expense deduction coming back in 2026?

No. The 2025 law removed the end date that would have restored it in 2026 ([26 U.S.C. 67](https://www.law.cornell.edu/uscode/text/26/67)). Only listed groups, such as Armed Forces reservists, can still deduct their own work costs ([IRS Publication 529](https://www.irs.gov/publications/p529)).

### Does no tax on overtime cover a nurse’s double time?

Only part of it. The deduction covers the premium that FLSA section 7 requires, the half in time-and-a-half, so the extra pay above that in double time does not count ([IRS FS-2026-13, overtime deduction FAQs](https://www.irs.gov/pub/taxpros/fs-2026-13.pdf)).

### Who gets the new $6,000 tax break?

Each person aged 65 or older gets an extra $6,000 deduction for tax years 2025 through 2028, phasing out above $75,000 of modified AGI, or $150,000 joint ([IRS, new deductions for workers and seniors](https://www.irs.gov/newsroom/one-big-beautiful-bill-act-tax-deductions-for-working-americans-and-seniors)). It is not tied to nursing; the return needs your SSN, and a joint return if you are married ([IRS, new deductions for workers and seniors](https://www.irs.gov/newsroom/one-big-beautiful-bill-act-tax-deductions-for-working-americans-and-seniors)).

## Sources

- [26 U.S.C. 67](https://www.law.cornell.edu/uscode/text/26/67): Subsection (h) denies miscellaneous itemized deductions for any tax year beginning after December 31, 2017; P.L. 119-21 sec. 70110 struck the 2026 end date.
- [IRS Publication 529](https://www.irs.gov/publications/p529): Unreimbursed employee expenses are no longer deductible except for Armed Forces reservists, qualified performing artists, fee-basis officials and impairment-related work expenses.
- [IRS FS-2026-13, overtime deduction FAQs](https://www.irs.gov/pub/taxpros/fs-2026-13.pdf): Only FLSA section 7 overtime qualifies, not overtime of exempt professional or executive employees; hospital alternative methods use the premium actually paid (Q17); $12,500 ($25,000 joint), phase-out above $150,000 ($300,000 joint); joint return and valid SSN; from 2026 only W-2 box 12 code TT, corrected by W-2c; Notice 2025-69 relief for 2025.
- [IRS, new deductions for workers and seniors](https://www.irs.gov/newsroom/one-big-beautiful-bill-act-tax-deductions-for-working-americans-and-seniors): The overtime deduction and the $6,000 deduction for people 65 and older apply for 2025 through 2028, for itemizers and non-itemizers; the senior deduction phases out above $75,000 of MAGI ($150,000 joint) and needs the SSN on the return and a joint return if married.
- [IRS Publication 334](https://www.irs.gov/publications/p334): Business expenses must be ordinary and necessary; a return is required with $400 of self-employment earnings; travel between workplaces is deductible, commuting is not.
- [IRS Publication 970](https://www.irs.gov/publications/p970): For 2025: lifetime learning credit up to $2,000 a return, American opportunity credit up to $2,500 per student, student loan interest up to $2,500 with a phase-out from $85,000 ($170,000 joint), and $5,250 of employer educational assistance excluded.
- [Form 2441 instructions](https://www.irs.gov/instructions/i2441): Each care provider is reported with a name, address and SSN, ITIN or EIN, and Form W-10 shows due diligence in getting it.

## More on this topic

- [Form W-2](/documents/w-2)
- [Receipts for tax records](/documents/receipt)
- [Tax document checklist (all clients)](/blog/tax-document-checklist)

## About the author

Arthur Teboul (Founder, DokuTrak) is building DokuTrak after watching professionals lose hours chasing clients for documents over email. [Arthur Teboul](/authors/arthur-teboul).

How this page was made (methodology): it is built from the primary sources listed under Sources, and every rule and figure on it links to the source it comes from. Last updated October 25, 2026. Spotted an error or a rule that changed? [Contact us](/contact).

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