Travel Nursing: Tax Home vs. Permanent Residence
C. Mike Emery, RN, CEO
Travel nursing has many perks. In addition to beautiful locations, elegant housing, awesome hospitals, and more nursing jobs than you have probably ever imagined, there is also tax free money. Tax free money is considered by some to be the biggest perk in travel nursing. However, not all nurses qualify to receive tax free money…legally. So what makes one nurse qualify when others do not? The simple determination is whether or not the nurse has a tax home or permanent residence. To help you better understand what each is and the difference, please read the following definitions and examples:
What is a tax home?
Broadly speaking, the definition of “tax home” is the home you return to on a regular basis where you incur substantial and recurring expenses. You should also have strong legal & historical ties. These might include: driver’s license, voter registration, banking, car registration, and mail delivery.
Example 1: Jane Homeowner, RN has a 1400 sq. ft home in North Carolina. She has a mortgage that she pays every month and has cancelled checks to back up her financial expenses of this home. When Jane travels, the expenses to keep this home remain. She pays the mortgage regardless if she is there or not. This is her tax home because when she travels, she will have a duplication of expenses. Therefore, she will be entitled to tax free reimbursements.
Example 2: John Renter, RN has a one bedroom apartment in Florida which he pays monthly rent in exchange for the dwelling. He also has cancelled checks, money order receipts, and a lease in his name to demonstrate he pays for the expense of this apartment. As John travels, he will still be responsible to pay for the rent on this apartment. This is his tax home because he will have a duplication of expenses when he travels. Therefore, he is entitled to tax free reimbursements.
Example 3: Robin Sharehouse, RN rents a home and has a room mate. The monthly rent is $1500 and she is responsible for half, or $750. She has proof such as a rental lease in her name, cancelled checks, money order receipts, and some paid in cash receipts, that she maintains a portion of this dwelling. When Robin travels, she is still financially responsible for her share of the dwelling. This is her tax home because she will have a duplication of expenses while she travels. Therefore she will be entitled to tax free reimbursements.