By February 23, 2017 0 Comments

Ask a Travel Nurse: Can I establish residency and qualify for the tax-free stipend?

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Ask a Travel Nurse: Can I establish residency and qualify for the tax-free stipend?

Ask a Travel Nurse Question:

Hello,

I’ve read your advice column and bought your book, and I’m hoping you can guide me.

I will be keeping my New York home address at my parents’ and paying them monthly. I’m relocating to California to Travel Nurse and want to get my own apartment so I can have a California address — with goal of starting grad school in about a year and a half.

I’m torn between getting my own apartment and taking the stipend — with the focus of having a California address for school— or letting the agency place me, in which case I won’t have my own mailing address for school.

I do plan to bring my car and would prefer to move my belongings and furnishings to California now, but then would I qualify for tax-free stipend with the agency? Can I establish residency and qualify for the tax-free stipend?

I’ve been researching daily for last two months and can’t find an answer. Please help!

Ask a Travel Nurse Answer:

In regard to your tax status, I do have to make the disclaimer that I’m not a tax professional, but believe I do have a good grasp of the tax implications surrounding Travel Nursing. However, I’ll also give you a great resource to confirm my information.

You would seem to meet the IRS requirement initially as you would be doubling your living expenses (because you are paying your parents to keep a room for you) and I’m assuming you would still have established this as your tax home for the time being.

It’s important to note that your tax home is not a physical place, but rather, an area where you normally do business. Having an actual home, or place that you are maintaining, is just one of a few things that the IRS looks at when determining a tax home. A few others would be things such as where you register your car or are registered to vote. Again, it’s really the general area that you have established as the place where you normally do business.

With the aforementioned in mind, while taking your belongings does chip away a bit at your tax home, I assume you would still have a few criteria that the IRS would count toward this tax status (like voting or car registration and paying to maintain a residence or place to which you could return).

Quite honestly, you are maintaining more than most Travelers. I know many a recruiter who has just told their Travelers to list their parent’s home as a tax home, sometimes knowing full well that this will likely never hold up to IRS scrutiny. Many Travelers also do this with the full knowledge that, should they ever be audited, it will not be pretty. But, you do have to get caught, and many are comfortable rolling the dice.

Since each case is individual, and you do have a few variables in play, a great resource for verification would be Joseph Smith over at TravelTax.com

He is the tax guru when it comes to taxes and the Traveler and has a great FAQ page on the site and even answers questions free of charge. He likely cannot tell you with certainty how the IRS would view your situation, but I know of no one else who would provide you the safest advice in tax matters.

As for a California apartment, why not let the travel company arrange the first one or two assignment locations and get the lay of the land? Then you can take a stipend once you have things scoped out.

Do be mindful that most travel companies won’t want to switch from company provided housing to a stipend if you are just extending an assignment at the same location (even if you are essentially committing to another full 13-week contract).

However, if you make this known before you sign the first contract, AND have it put into the original contract (something like … if Traveler extends for another full 13 weeks, Traveler reserves the right to select a housing stipend instead of company housing on further contract extensions), then you should be OK.

I hope this info helps with your plans 🙂

David

David@travelnursesbible.com

First time bonus!
Posted in: Ask a Travel Nurse

About the Author:

Hello everyone. I’m a travel nurse originally from Ohio who graduated in 1993 from Mount Carmel School of Nursing in Columbus. I completed a critical care fellowship at Riverside Methodist Hospital in 1994 and started traveling in that specialty a year later. My first travel assignment was in Maui and since that time I have completed close to 40 different contracts in various states with multiple travel companies. I am the author of Travel Nurse’s Bible (A Guide to Everything on Travel Nursing), in addition to my writings here and in the pages of Travel Nursing publications such as Healthcare Traveler Magazine and American Nurse Today. I am presently on assignment in Phoenix, AZ and travel anywhere from six to eleven months of the year.

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