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Travel nursing is a great career option for those who love to travel and want to experience new places while working. One of the perks of being a travel nurse is the tax-free stipend that comes with it. In this article, we will discuss everything you need to know about the travel nursing tax-free stipend.
What is a Travel Nursing Tax-Free Stipend?
A travel nursing tax-free stipend is the amount of money that a travel nurse receives as a reimbursement for their travel expenses and housing costs. This stipend is tax-free because it is considered an expense reimbursement and not a form of income.
How is the Stipend Calculated?
The stipend amount can vary depending on the location of the travel nursing assignment and the individual’s tax home. The IRS has set guidelines for the maximum tax-free stipend amount that can be given to a travel nurse per day. This amount is based on the cost of living in the area where the nurse is working.
What is a Tax Home?
A tax home is the location where a travel nurse has their permanent residence. This can be their actual physical address or the location where they have established themselves as a resident for tax purposes.
How Does Your Tax Home Affect Your Stipend?
Your tax home can have a significant impact on your stipend amount. If your tax home and your travel nursing assignment are in different locations, you may be eligible to receive a higher stipend amount. However, if your tax home and travel nursing assignment are in the same location, you may not be eligible to receive a stipend at all.
What are the Restrictions on the Stipend?
While the travel nursing tax-free stipend is a great perk, there are some restrictions on its use. The stipend can only be used for travel and housing expenses related to the travel nursing assignment. Any unused stipend amount must be returned to the travel nursing agency.
Do You Have to Pay Taxes on the Stipend?
The travel nursing tax-free stipend is considered a reimbursement and not a form of income, which means it is not subject to federal income tax. However, you may be required to pay state taxes on the stipend depending on the state you are working in.
How to Qualify for the Stipend?
In order to qualify for the travel nursing tax-free stipend, you must be a travel nurse who is on a travel assignment that requires you to be away from your tax home for a minimum of one year. You must also have a tax home that is separate from your travel assignment location.
Conclusion
The travel nursing tax-free stipend is a great perk for travel nurses who are looking to experience new places while working. By understanding how the stipend works and what restrictions there are, you can make the most of this benefit and enjoy your travel nursing experience.