Our easy-to-use travel nurse resources ensure you’re supported at every stage of your career—from state licensing and credentialing to important tax strategies.

 
 

Tax Resources

Answers to your tax questions

There are significant tax advantages for travel nurses. The links and downloadable forms below provide valuable information to help you keep more of your paycheck in the bank.* Browse through them and talk to your RNnetwork recruiter about any questions you have.

Completing a federal and state income tax return every year can be a daunting task, especially for travel nurses. That's why RNnetwork recommends that you seek qualified tax help.

Tax Information

Travel Tax Benefits

Frequently Asked Questions

Q: How do I qualify for nontaxable travel benefits (transportation, housing costs or allowances, meal per diems, etc.) as a travel nurse?
A: To receive nontaxable travel benefits, the following rules must be met:
1) You must have a permanent tax home.
2) Your travel assignment must not be within commuting distance of your permanent tax home, and each individual travel assignment, including extensions and other assignments cannot be expected to keep you in the same general area for more than one year.

The first rule is complex and can be quite subjective depending on your facts and circumstances. More detailed information for all three rules is available in the Contract Package and on rnnetwork.com.

Q: What are the consequences if I do not meet one or more of these rules?
A: If you fail to meet the first rule, all travel costs must be treated as taxable income from the beginning of an assignment. The taxable income would include all meal per diems, housing allowances or company-paid housing costs, and mileage. These amounts would be subject to payroll tax withholding.

If you maintain a permanent tax home and your travel assignment is within commuting distance of your tax home, no travel benefits will be paid because travel costs should not be incurred.

If the one-year limit rule is failed, all of the travel benefits you receive must be treated as taxable income as soon as it becomes expected that the one-year limit will be exceeded. Generally, it is considered expected at the time you agree to an assignment or extension that will make the total length of time you spend in the assignment area longer than one year. The taxable benefit rule goes into effect on that date and continues through the remainder of the assignment.

Q: What requirements must be met before I can receive travel benefits (e.g., meal per diems, housing, transportation costs) for a travel assignment?
A: To receive travel benefits, RNnetwork must expect that you will incur travel costs, and your travel assignment cannot be within commuting distance of your tax home.

Q: When should I complete the Tax Home Representation form?
A: The Tax Home Representation form must be completed on the following occasions:
1. Prior to the start of your first assignment
2. Every time you execute a new Professional Services Agreement (generally annually)
3. Whenever there is a change in your tax home status
Be sure to keep the Tax Home Determination worksheet.

Q: Who makes the final decision about whether I have a permanent tax home?
A: Because the decision of the tax home status is sensitive to your facts and circumstances and can be highly subjective, you must make the final decision and complete the Tax Home Representation form. The Salt Lake City based Tax Department may help clarify the tax rules, but the final conclusion resides with you. We recommend you get the advice of a professional tax advisor.

Q: Who monitors the one-year limit and commuting rules for me?
A: Your RNnetwork recruiter, with the help of our payroll and tax departments, monitors these rules and informs you of your status as these rules may be critical factors in deciding whether you accept an assignment or assignment extension. The one-year limit can be evaluated easily prior to each assignment extension, and the time and distance criteria for commuting can be determined from Internet mapping sites such as MapQuest.

Q: Why is the Housing Allowance Representation form required?
A: To receive nontaxable housing allowances, the requirements listed above must be met, and RNnetwork must also be able to show a "reasonable belief" that temporary lodging expenses are actually incurred by you while you are on assignment away from your tax home. The Housing Allowance Representation form provides that "reasonable belief."

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Tax information contained here is not intended to be used, and cannot be used, by any person as a basis for avoiding tax penalties that may be imposed by the IRS or any state. We recommend each taxpayer seek advice based on their circumstances from an independent tax advisor.

Travel Reimbursement Form

Frequently Asked Questions

Q: What is the purpose of the travel reimbursement form?
A: The form is a place for you to document the "business" mileage you drive on a travel assignment, so you don’t have to pay taxes on the travel allowance you are paid for the mileage.

"Business" miles include the miles you drive to and from your tax home to the assignment housing. You will not have to pay taxes on your travel reimbursement if you submit the form in a timely manner and you meet all three of the following tax rules:
1. You have a tax home
2. Your assignment, including extensions, is not expected to keep you in the same area for more than a year
3. Your assignment is not within commuting distance of your tax home

Q: What if I don't return to my tax home after an assignment, but I drive directly to a new assignment instead?
A: You can claim the mileage you drive from your current assignment to your new assignment with RNnetwork on your travel reimbursement form.

Q: When should the travel reimbursement form be submitted?
A: The travel reimbursement form should be submitted twice:
1. Within one week after completing the trip from your tax home to your assignment housing
2. Within one week after returning home from your assignment or before driving to the next assignment if you are not returning home

Q: Where should the travel reimbursement form be submitted?
A: Fax your form to the RNnetwork office in Boca Raton at 800.359.8480 to receive your reimbursement.

Q: When will I receive my reimbursement payment?
A: If your form is received by the payroll department on the Friday morning prior to your regular payday, your reimbursement will be paid with your next regular paycheck.

Q: What is the maximum travel reimbursement amount I can receive for an assignment?
A: The travel limit is determined for each assignment individually. Your recruiter will tell you what the limit is before you travel.

Q: What receipts or other documents should I keep to support my travel reimbursement claims?
A: Because the reimbursement is based solely upon the miles you drive, you do not need to keep gasoline costs or other detailed receipts.

Q: Who can answer other travel reimbursement questions I might have?
A: Your recruiter can answer your questions, or your recruiter may refer you to someone in our payroll department who can answer your questions.

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Tax information contained here is not intended to be used, and cannot be used, by any person as a basis for avoiding tax penalties that may be imposed by the IRS or any state. We recommend each taxpayer seek advice based on their circumstances from an independent tax advisor.

State Income Tax

Frequently Asked Questions

Q: Is state income tax withholding required in the state where I work (worksite state) and/or in the state of my tax home (state of residence)?
A: Most states subject travel nurses to taxation in the state where they work, regardless of their state of residence. Generally, there is no minimum work period in terms of days or weeks that helps you avoid this. Worksite-state withholding might not apply if your income is below the worksite state's minimum amount, but this is unlikely for a travel nurse income, even for just a week.

Some neighboring states have agreements stating that the worksite state will not require income tax withholding from income paid to a resident of one of the participating states, but state withholding will be made for the worksite state if your state of residence and the worksite state do not have such an agreement.

If the worksite state has no income tax or has a tax rate lower than your state of residence, your state of residence may require withholding to the extent that their tax rate is greater. Certain states may require full income tax withholding regardless of how the withholding is handled in the worksite state; this amounts to double tax withholding. This double tax withholding should be partially or fully eliminated through tax credits claimed on your state of residence annual income tax return (see below).

If you have questions about what state taxes will be withheld while you are on assignment, your RNnetwork recruiter can direct you to our payroll department for answers.

Q: Am I required to file a state income tax return in the worksite state(s)?
A: Travel nurses are usually required to file a state income tax return for the worksite state if the state has an income tax. If you claim an appropriate amount of exemptions on Form W-4, the withholding on your income should be close to the return liability, so any payment or refund due on your annual tax return should be minimal. Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming do not have an income tax.

Q: What income is taxed in my state of residence and in the worksite state?
A: Only the income you earn from an assignment in the worksite state is subject to tax in the worksite state. However, in most cases, all income you earn (including what you earn in worksite states) is subject to tax in your state of residence. Your state of residence usually provides you a full or partial credit for the taxes paid to a worksite state(s). This credit should partially or fully eliminate the double tax, except to the extent the worksite state has a higher tax rate than your state of residence.

Q: Does working in more than one state make my annual income tax returns more complicated?
A: The short answer is "Yes." You may have to file annual income tax returns in two or more states, including your state of residence. If you are tax savvy, reasonably priced tax software can be helpful. Otherwise, we recommend you ask a tax professional to prepare the returns for you.

Q: Could my state of residence be challenged by state tax authorities?
A: It's possible, which is one more reason to get the help of a tax professional. It's possible that a worksite state might contend that it should be reported as your state of residence and require you to file a resident income tax return instead of a "nonresident" return in that state, especially if you work most of the year in a single state and you have other income that would also be subject to tax as a resident. We recommend that you consult with your tax advisor if you believe this might become a problem for you.

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Tax information contained here is not intended to be used, and cannot be used, by any person as a basis for avoiding tax penalties that may be imposed by the IRS or any state. We recommend each taxpayer seek advice based on their circumstances from an independent tax advisor.

Commuting Defined

What You Need to Know

The Internal Revenue Service only considers the travel benefits you receive from RNnetwork to be nontaxable income if you are traveling "away from home." If your travel assignment is within commuting distance of your tax home, you will not be eligible to receive any travel benefits. IRS Publication 463 contains more information.

Q: How far is "commuting distance"?
A: IRS tax rules do not provide precise distance criteria for "commuting" vs. "away from home." Commuting is generally referred to as within your metropolitan area if you live in a city, but includes a broader geographical area if you are in a rural setting. A commonly used guideline is 50 miles one way. Keep in mind that this is not an IRS guideline and could be too short a distance in rural settings where 50 miles can be traveled in 45 minutes and a reasonable distance cut off could be as high as 100 miles.

A minimum 50-mile limit does apply to moving expense rules but should not be considered a definitive cutoff for determining "away from home" distances. Internet mapping sites can help you identify your tax home to worksite time and distance. Travel time and "traveler's intentions" are generally more important factors than distance when determining "away from home."

Q: How does the IRS use "time" to determine "commuting" or "away from home"?
A: The IRS defines travel "away from home" as resulting from work duties away from the general area of your tax home and where sleep or rest is necessary to meet work demands (see IRS Publication 463). Other guidelines suggest that the workday and travel time must last substantially longer than an ordinary day's work and require an overnight stay.

Again, no clear guidance is provided and it becomes a subjective decision based upon common practices in the area. However, the one-way travel minimums could approach 2 hours in an urban/suburban setting and 1.5 hours in a rural setting. Longer work shifts of 10 or 12 hours would generally justify a shorter travel time cutoff.

Q: What is meant by "traveler's intentions"?
A: If you will be staying in company-provided housing, it is good evidence that you will not be returning to your tax home routinely during your workweek. However, if you have indicated or implied the "intention" to return home more than occasionally during the workweek, that would be a strong indicator that the assignment is within commuting distance of your tax home.

Our best estimate

A conservative cutoff for one-way commuting distance might be the lesser of 50 miles or 2 hours in an urban/suburban area and 100 miles or 1.5 hours in a rural area. These guidelines could be reduced depending on common practices for the assignment area and for longer work shifts.

Consulting with the client facility will help you and your recruiter determine the typical commuting time and distance for the area. If your assignment is determined to be travel "away from home," and the other criteria are met, you will receive travel benefits.

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One-year Limitation Rule

What You Need to Know

The IRS has long held that for a travel nurse to receive nontaxable travel benefits (meals, housing, and transportation) while on assignment, the travel assignment must be temporary. For an assignment to be considered temporary, it must be expected to last less than one year in length.

If the assignment is expected to last longer than one year, the assignment area is considered to be the travel nurse's tax home and all travel benefits paid would be considered taxable income to the nurse. The IRS rationale is that the travel nurse would likely move his or her residence to minimize travel expenses for an assignment expected to last more than one year.

Assignment Extensions

IRS rules provide that a travel nurse assignment meets the temporary requirement if the assignment is expected to last less than one year, and does in fact last less than one year.

If an assignment is extended so that it is then expected to last more than one year, all transportation, meal and incidental, and housing allowances, and corporate-paid housing costs must be treated as taxable income beginning with expenses incurred when it first becomes expected that the one-year limit will be exceeded—not when the 366th day is reached.

Expenses incurred prior to when it is first anticipated the one-year limit will be exceeded do not need to be reclassified as income. However, all subsequent expense reimbursements must be treated as taxable income.

Location limits

The one-year limitation rule applies to the work location, not just one assignment. The rule applies whether you were employed by one agency or more than one and continued to work in the same general area (i.e., within commuting distance of your current worksite or housing) without a significant break in service.

Since all travel nurse assignments usually have defined lengths and are less than one year, a taxation concern generally arises when the assignment includes extensions that begin to approach the one-year limit. You and your RNnetwork recruiter should monitor such situations jointly.

Restarting the clock

The IRS one-year limitation rule is fairly objective. However, one area that can create uncertainty is how long a travel nurse must stay away from an assignment or location to restart the one-year clock.

IRS Rules
The IRS has specifically ruled that a break of three weeks away from the current worksite area is too short to restart the one-year clock. It has also ruled that a break from a worksite area of seven months is significant enough to restart the counting. Unfortunately, the IRS has provided no guidance for break lengths between these extremes.

RNnetwork Guidelines
Our position is consistent with NATHO guidelines, which state that a break between assignments in the same location of 13 or more weeks should be significant enough to restart the one-year clock. The 13-week length is approximately midway between the 3-week and 7-month rulings and is also the typical length of a travel nurse assignment.

The break may be for pleasure, education, an assignment in another location, or any other reason or combination of reasons as long as the break is in a location outside typical commuting distance from the current assignment and current temporary housing. Multiple short breaks totaling more than 13 weeks will not accomplish the necessary break. In addition, there must be no written or oral understanding of returning to the assignment or assignment area during this break. If there is, the break will not qualify to restart the one-year clock.

NOTE: As a result of the seasonal case law rulings, summer vacations during school-based assignments do not qualify as a break in service.

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The information given here is general in nature and subject to change. Tax information contained here is not intended to be used, and cannot be used, by any person as a basis for avoiding tax penalties that may be imposed by the IRS or any state. We recommend each taxpayer seek advice based on their circumstances from an independent tax advisor.

Supplemental Wage Payments

Frequently Asked Questions

Q: What are supplemental wage payments?
A: Supplemental wage payments include bonuses (e.g., completion, extension, or referral bonuses); lump-sum vacation pay; and taxable transportation, housing costs or allowances, meal per diems, and any other forms of taxable payments not considered regular wages.

Q: How and when am I paid supplemental wage payments?
A: Supplemental wage payments are generally paid on the next pay cycle after the Payroll Department receives complete documentation authorizing and approving the payment. The amount is combined with the week's pay unless you had no regular earnings for that week, in which case a separate check or direct deposit will be made.

Q: What Federal payroll taxes are withheld from supplemental wage payments?
A:

  • Federal FICA tax (Social Security and Medicare) is withheld at the required rate on all taxable supplemental wages.
  • Federal income tax is withheld at the IRS required 25% tax rate for bonuses, lump-sum vacation pay, and other pay that is not routine (weekly/monthly) in nature.
  • Taxable housing costs and allowances, meal per diems, and other taxable supplemental wage payments are added to the current week's pay to determine Federal income tax withholding according to standard IRS withholding tables. The tax determined under the withholding tables will depend on your W-4 status and the amount of your base pay and supplemental pay. Federal income tax withholding could range from 10 percent to 35 percent.

Q: To what state are supplemental wage payments reported and income tax withheld?
A: If the supplemental wage payment is associated with an assignment in a single state, it will be reported as income earned in that state and that state's tax (if any) will be withheld. Additional state tax may be withheld for your state of residence depending on the tax rules and tax rates of that state as compared to the assignment state's tax rates. If the supplemental wage payment applies to more than one assignment, then it will be sourced to your state of residence only.

Q: Are supplemental wage payments subject to 401(k) contribution withholding?
A: Completion bonuses, extension bonuses, lump-sum vacation pay, and any other bonus amounts are subject to 401(k) contributions withholding if you are participating in the 401(k) plan. Taxable housing allowances and costs, taxable meal per diems, and taxable travel reimbursements are not subject to 401(k) contribution withholding.

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Tax information contained here is not intended to be used, and cannot be used, by any person as a basis for avoiding tax penalties that may be imposed by the IRS or any state. We recommend each taxpayer seek advice based on their circumstances from an independent tax advisor.

Tax Forms

Tax Home Status Temporary Lodging Expense Representation Travel Reimbursement form Nursing License Expense Reimbursement form Alien Tax Home Representation form

*Tax information contained in these documents is not intended to be used, and cannot be used, by any person as a basis for avoiding tax penalties that may be imposed by the IRS or any state. We recommend each taxpayer seek advice based on their circumstances from an independent tax advisor.