Travel Nursing: Tax Home vs. Permanent Residence
C. Mike Emery, RN, CEO
What is a permanent residence?
A permanent residence is a place where you live that has legal and historical ties but does not require the maintenance of a primary home.
Example 1: Sally Parents, RN lives with her mom & dad. Being their daughter, her parents don’t charge her rent and let her have nearly full use of the house. Sally, therefore, does not have a tax home, but this is her permanent residence. When Sally travels, she is not entitled to tax free reimbursements.
Example 2: Susie Boyfriend, RN lives with her long time boyfriend. The house is mortgaged in her boyfriend’s name. Susie doesn’t pay rent. This is Susie’s permanent residence, but not her tax home. Therefore, she is not entitled to tax-free reimbursements.
Misconceptions cleared up
It is probably becoming clear that claiming an address doesn’t give you rights to tax free reimbursements. You must have substantial recurring expenses to legally qualify for tax free reimbursements. If you are claiming your parent’s home, relative’s home, or your significant other’s home as your tax home it must be validated:
• 1- You will need a contract showing that you have substantial financial obligations to maintain the residence.
• 2- Rent must be fair market value and the recipient of the rent must claim the income on their taxes.
• If you have a tax home, but rent it out while traveling, without maintaining a portion of it for yourself, you are disqualified from tax free reimbursements.
• You can not use storage units as a residence.
• Do not use a P.O. Box as a residence. (In other words don’t go out and get a P.O. Box just to have an address in the state)
• If you live in an RV that you take with you on assignments, you do not qualify for tax free reimbursements. In this instance, your home goes with you and you will not have duplicate expenses.
• Staying in one location for 12 months or longer will disqualify you from tax free reimbursements.
I hope this helps you gain a better understanding of tax home vs. permanent residence. I also must say, nothing substitutes the advice of a good accountant / tax professional. Therefore, please do not consider this posting as tax advice, but rather information to help glean a better understanding of what a tax home and permanent resident are. If you would like more information on travel nursing and tax free money, my company offers a free report, “Travel Nursing And Tax Free Money…What Every Travel Nurse Should Know”. Just click on Travel Nursing to be directed to our website to request your free report.