Travel nurse taxes: proving your tax home and keeping the right records

Everything on a traveler’s return turns on one place. Your tax home is generally your regular place of work, the whole city or area where it sits, wherever your family lives (IRS Publication 463). Travelers often have no regular post, so the IRS looks at where you regularly live instead (IRS Publication 463).

You are traveling away from home when work keeps you away from that area longer than an ordinary day, and you need sleep or rest to do the job (IRS Topic 511). Only then can travel costs be deducted, or agency stipends paid as travel money stay out of income.

A nurse who fails the test is treated as a transient. An itinerant is a worker whose tax home is wherever they work (IRS Publication 463). An itinerant can never be away from home, so there is no travel deduction at all (IRS Publication 463). That is why the proof below matters more than any receipt.

With a tax home in place, here is what still counts, by pay type.

The IRS uses three factors when you have no main place of work (IRS Publication 463). Meet all three and your tax home is the home where you regularly live (IRS Publication 463). Meet two and it depends on the facts; meet one and you are an itinerant (IRS Publication 463).

Agencies split pay into a taxable hourly rate and stipends for housing, meals and travel. The stipends stay out of wages only for travel away from your tax home, so the pay stub needs to show the split. Keep every stub, or the year-end pay summary, with the contract for each assignment.

The length of each assignment matters too. A temporary assignment is one realistically expected to last, and that does last, 1 year or less (IRS Publication 463). If an assignment in one place is expected to run longer than 1 year, it is indefinite, and the money you get for living costs becomes income even if it is called a travel allowance (IRS Publication 463). That place also becomes your new tax home (IRS Publication 463).

So keep the contract dates for each extension. For example, a 13-week contract extended three times in the same hospital may cross the line once the total is realistically expected to pass a year (IRS Publication 463).

Many travel nurses are agency employees on a Form W-2. As an employee, you cannot deduct unpaid travel, license or scrub costs on the federal return; the IRS says most employees cannot deduct unreimbursed travel (IRS Topic 511). A gap between two contracts does not change that, and the 2025 law kept the bar in place for good (26 U.S.C. 67). Your state may still allow them, so keep the receipts.

A traveler who contracts directly with a facility, paid on Form 1099-NEC, deducts travel costs on Schedule C. That covers lodging at the assignment, meals at actual cost or a per diem rate, and driving between your tax home and the assignment. Only half of what you spend on meals is deductible (IRS Publication 463). A hospital that books you directly sends Form 1099-NEC for 2025 pay of $600 or more (Form 1099-NEC instructions (2025)), and for 2026 pay only from $2,000 (Form 1099-NEC instructions). The 1099 contractor checklist covers the rest of that side.

W-2 travelers on hourly contracts may also use the overtime deduction for tax years 2025 through 2028 (IRS, new deductions for workers). It reaches only the FLSA premium, capped at $12,500 or $25,000 for a couple, and from 2026 only what each agency reports in box 12, code TT, of its W-2 (IRS FS-2026-13, overtime deduction FAQs). With three agencies in a year, check three W-2s. The staff nurse page covers the overtime records in more detail.

A year with assignments in several states can mean a return for each, plus your home state. Each work state may tax the wages earned there, and your home state usually gives a credit for tax paid to the others. Rules vary by state, and some states have no income tax at all.

Your W-2 lists wages and withholding by state in its state boxes. Check them against your own list of dates in each state. A wrong state code on the W-2 is easier to fix with the agency before you file than after.

Keep the tax home file in one place for the whole year. A shared folder with the lease, bills and a running calendar works well. When your preparer asks where you lived in a given month, the answer is then a single page, not a search through old texts and emails.

The best time to build the proof is before you leave, not at tax time. Agencies often ask for your permanent address at sign-up, and some ask how you keep it. Having the file ready also helps if your state of residence asks questions later.

1. Keep the lease or mortgage at your main home in your own name.
2. Pay its rent, utilities and insurance from your own account all year.
3. Keep your license, car registration and voter record at that address.
4. Go home between contracts, and note the dates in a calendar.
5. Take local shifts near home when you can, and keep those pay stubs.

• IRS Publication 463: Tax home definition, the three-factor test, itinerants, the rule that an assignment expected to last more than 1 year is indefinite and its living allowances are income, reimbursements for travel away from the tax home, and the 50% limit on meals.
• IRS Topic 511: Travel expenses are costs of traveling away from the tax home for work; most employees cannot deduct unreimbursed travel.
• 26 U.S.C. 67: Miscellaneous itemized deductions are denied for tax years after 2017, with no end date since P.L. 119-21.
• Form 1099-NEC instructions: For tax years after 2025, the reporting threshold rises to $2,000.
• Form 1099-NEC instructions (2025): For payments made in 2025, Form 1099-NEC reports nonemployee compensation of $600 or more.
• IRS, new deductions for workers: The overtime deduction applies for tax years 2025 through 2028.
• IRS FS-2026-13, overtime deduction FAQs: Only FLSA section 7 overtime qualifies, up to $12,500 ($25,000 joint); 1099 reporting only for FLSA employees treated as contractors; from 2026 only the W-2 box 12 code TT amount can be deducted.