Travel Nurse Tax Home Rules: The 50-Mile Rule Is Not in the Tax Code.

A med-surg nurse signs a 13-week contract in Phoenix. The package pays $900 a week in taxable wages and another $1,267 a week the recruiter calls non-taxable, because the nurse's permanent address is more than 50 miles from the hospital. That address is a sister's spare bedroom in Tucson, rent-free. The travel nurse tax home rules turn on the second fact rather than the mileage, and the 50-mile rule the recruiter quoted is not in the tax code.

There is a 50-mile test in the Internal Revenue Code. It sits in IRC §217(c)(1), the distance test for the moving expense deduction, and it requires the new workplace to be at least 50 miles farther from the old residence than the old workplace was. It has nothing to do with per diem, and P.L. 119-21 made the suspension of §217 permanent for everyone but active-duty Armed Forces. Staffing agencies borrowed the number as a screening tool and it hardened into folklore.

The real test for being away from home is whether the work requires sleep or rest. The Supreme Court upheld that construction in United States v. Correll, 389 U.S. 299 (1967), which applies regardless of how many miles a trip covered or how many hours it consumed. A nurse who drives 70 miles each way and sleeps at home every night has no travel expense and no tax-free stipend. A nurse 40 miles out who pays for a second place might.

Your tax home is your regular place of business, not the address on your driver's license. Travel nurses rarely have one, so the analysis falls back to whether you have a home in any real sense. Rev. Rul. 73-529 gives three factors: whether you do some business near the claimed home, whether you incur living expenses there that get duplicated when you leave, and whether you have kept genuine ties to the area rather than abandoned it.

Hit all three and you have a tax home. Hit two and the IRS weighs the whole picture. Hit one or none and you are an itinerant: your tax home follows you to each assignment, so you are never away from it and nothing the agency pays you is tax-free.

The factors do work for taxpayers. In Geiman v. Commissioner, T.C. Memo. 2021-80, a union electrician spent 2013 on jobs across Wyoming and Colorado, none longer than a few months. The Tax Court found he had no principal place of business, ran the Rev. Rul. 73-529 factors, and held his tax home was Clifton, Colorado, where he owned a trailer home and had lived since 2007. Same shape as a travel nurse year.

Duplicated expenses is the factor that fails.

Factor two is where nurses lose. Handing a parent $50 a month for a bedroom is not duplicating living expenses. A lease or a mortgage you keep paying from your own account while you also pay for housing on assignment is. If the agency houses you and you pay nothing back home, nothing is duplicated and there is nothing to reimburse. Factor one is the cheap fix: a few PRN shifts near home each year, which costs a weekend and is what is usually missing when an examiner asks.

The flush language at the end of IRC §162(a), added by section 1938 of the Energy Policy Act of 1992, says a taxpayer is not treated as being temporarily away from home during any period of employment that exceeds one year. Rev. Rul. 93-86 makes it an expectation test. Work realistically expected to last a year or less, and that does, is temporary. Work expected to run longer is indefinite from the first day, even if it ends early. If the expectation changes partway through, the assignment is temporary up to that date and indefinite after it.

That last sentence is the extension trap. Three 13-week contracts in one city is 39 weeks and fine. Signing the extension that carries you past 12 months makes every stipend dollar from the signing date forward taxable, and it is the signing date that counts, not the day you cross the twelfth month. Moving to another hospital resets nothing: §162(a)(2) looks at the location, and the IRS treats a metropolitan area as one location. The 12-months-in-a-rolling-24 rule recruiters quote is convention, not law.

The stipend is a per diem allowance paid under an accountable plan. Treas. Reg. §1.62-2 asks three things of that plan: a business connection, substantiation, and the return of anything paid above what was substantiated. The same rules let an S-corp owner reimburse a home office.

Rev. Proc. 2019-48 spares everyone the receipts. An employer paying at or below the federal per diem rate for the locality has an amount deemed substantiated, no lodging folios required. For federal fiscal 2027, beginning October 1, 2026, the standard CONUS rate is $181 a day, $113 lodging and $68 meals and incidentals, with 295 localities set higher. Anything above the locality rate is wages on the spot.

The requirement that breaks is the first one. A business connection means the plan is reimbursing an expense that would have been deductible. With no tax home there is no away-from-home expense, so the plan has nothing to reimburse and every dollar it paid is wages under Treas. Reg. §1.62-2(c)(5). Notice who carries that. The agency collected a signed certification that you had a tax home; proving it is on you.

Before 2018 a nurse who lost this argument could still deduct the lodging and meals on Schedule A, which is what Geiman was fighting about for 2013. That door is shut. IRC §67(g) suspended miscellaneous itemized deductions subject to the 2% floor, and P.L. 119-21 made the suspension permanent, carving out only educator expenses beginning in 2026. Form 2106 now belongs to reservists, qualified performing artists, fee-basis officials, and employees with impairment-related work expenses. A travel nurse is none of them, so losing the argument costs the stipend with nothing on the other side.

All of that is federal. States tax wages where the work was performed, so four contracts in four states usually means four nonresident returns plus a resident return at home that credits the tax paid elsewhere. Nine states do not tax wage income, which is why a Texas or Florida contract cuts the filing down. It is the same allocation math that trips up people working two remote jobs.