How Long Can a Travel Nurse Stay in One Place?
Travel nurses typically receive tax-free reimbursements for various expenses because they travel away from their tax-home for work. However, there are limits as to how long a travel nurse can stay in one place and continue to qualify for tax-free reimbursements. In this article, we’ll discuss all of this topic’s angles so travel nurses can approach it with confidence.
How Long Can an Itinerant Travel Nurse Work in the Same Place?
First, it’s important to note that you must have a tax-home in order to qualify for tax-free reimbursements. If you do not have a tax-home, then the IRS considers you to be an itinerant worker. If you are an itinerant worker, then the IRS views your tax home as wherever you work.
We covered tax homes extensively in a previous article. We encourage you to view that article here.
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Itinerant travel nurses can still work travel nursing jobs so long as the agency and the hospital will approve it. However, itinerants cannot receive tax-free reimbursements for things like lodging, meals and transportation. Even if an agency were to pay these reimbursements to an itinerant travel nurse, the itinerant travel nurse must pay taxes on them.
Therefore, if you’re an itinerant travel nurse, then you can work in the same place for as long as you would like. That said, the hospital or agency may limit your time in any given location. However, those limits would not necessarily pertain to your tax-status.
The Reason Travel Nurses Can’t Stay in One Place for Too Long
Travel nurses who have a legitimate tax home and receive tax-free reimbursements while on assignment can’t stay in one place for too long because their tax-home could shift to that location. This is actually much worse than it sounds.
You see, the IRS defines a tax home as, “the entire city or general area in which your business or work is located…regardless of where you maintain your family home.” Therefore, your tax-home is more about where you work, and less about where you call home.
Now, here’s the thing. If your tax-home shifts, then you need to pay taxes on all the tax-free reimbursements you collected for the entire period you were there. This retroactive treatment can result in a large unexpected expense.
Additionally, the IRS says that your tax home is, “…your main place of business….”. Moreover, the IRS recognizes that you may work in multiple places and they provide detailed examples of various such scenarios in Publication 463.
How Does the IRS Define a “Place” or the Length of Time?
Next, it’s important to note the ambiguous language the IRS uses in their definition of a tax home. They say it is the, “entire city or general area in which your business or work is located”. What is a “general area”?! That could be lots of things!
As a result, there are some “places” that we have an exact explanation for. But there are other “places” that are more difficult for us to define. Therefore, we must rely on prior IRS court cases for guidance.
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The IRS also provides a definition for the length of time you can stay in any “general area” and continue to qualify for reimbursements. In this case, the IRS says that your assignment cannot be “indefinite.” They define an indefinite assignment as an assignment that is, “realistically expected to last for more than 1 year.”
General Criteria
As you can see, the IRS does not provide a clearly defined rule for how long workers can stay in one place before their tax-home shifts there. However, we now have 3 general criteria. They are as follows:
- The amount of income relative to your total income matters
- Location is defined as a “city or general area”
- 12 months is the maximum duration
How Does Income Factor Into The Equation?
Here is a direct quote from IRS Publication 463:
If you have more than one place of work, consider the following when determining which one is your main place of business or work.
- The total time you ordinarily spend in each place.
- The level of your business activity in each place.
- Whether your income from each place is significant or insignificant.
Example. You live in Cincinnati where you have a seasonal job for 8 months each year and earn $40,000. You work the other 4 months in Miami, also at a seasonal job, and earn $15,000. Cincinnati is your main place of work because you spend most of your time there and earn most of your income there.
This is very clear. There is no gray area here. Note that the IRS does not say anything about duplicating expenses or where you conduct your personal business like voting and vehicle registration. If you engage in this pattern year after year after year, your tax home can shift to the location where you earn most of your income and spend most of your time.
How Long Can a Travel Nurse Stay in One “Place”?
While there is no hard-rule on how long a travel nurse can work in one place, the general rule of thumb based on IRS court rulings is to never work in one place for more than 12 months in any rolling 24-month period. However, you must also ensure that the income you earn in any one travel destination does not continually constitute the majority of your total annual income.
How Long Does a Travel Nurse Have to Leave Before They Can Return to the Same Place?
Therefore, how long a travel nurse must leave before they can return to the same place depends on the following three criteria:
- How long the travel nurse has already worked there.
- How long the travel nurse intends to stay upon returning.
- The percentage of annul income that the specified location has accounted for over the last 24 to 36 months
We have a lot to unpack here. Let’s look at some examples.
Example 1: Travel Nurse Returns Home for 30 Days
Let’s say you work as a travel nurse in Place(X) for 360 days, which is nearly 1 year. Then, you return to your tax-home and work PRN at your local hospital for 30 days. Next, you return to Place(X) as a travel nurse immediately following your 30 days at home.
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How long can you work in Place(X) before you run afoul of the general guidelines? If you said, “Just over one month.”, then you are right! You’ve only worked one month away. Therefore, 11 of the previous 12 months were in Place(X).
This is a scenario that many people in the industry believe will satisfy the requirements. Unfortunately, it does not. You wouldn’t be able to complete the standard 13-week contact when you returned.
Example 2: Travel Nurse Routinely Returns to the Same Location
Now let’s say that you work as a travel nurse in Place(X) for 5 months. Then, you take some time off. Then, you return to your tax home and work for 4 months. Now let’s say that you repeat this process for several years, always returning to Place(X) to work travel assignments.
Technically, you’re never working in Place(X) for longer than 12 months in any rolling 24-month period. However, if you are earning more income in Place(X) than you do at your tax home while also working for equal or more time than you work at your tax home, then your tax home could shift to Place(X) at some point. This pretty much fits the example I provided above from the IRS.
Remember, first and foremost, your tax home is where earn your income. If you continually earn most of your income in the same place, then that place will eventually become your tax home.
The bottom line is that travel nurses must continue to move around in order to maintain their current tax home. Now let’s take a look at how all of this relates to different kinds of “places”.
How Long Can a Travel Nurse Stay at the Same Hospital?
The generally accepted rule of thumb is never to work more than 12 months in any rolling 24-month period at the same hospital. Additionally, you want to make sure that no hospital away from your tax home becomes the leading source of your income over a period of multiple years.
How Long Can a Travel Nurse Stay in One City?
The generally accepted rule of thumb is never to work more than 12 months in any rolling 24-month period in the same city. Additionally, you want to make sure that no city away from your tax home becomes the leading source of your income over a period of multiple years.
Many travel nurses wonder if they can work in the same city for years as long as they always change hospitals. If you do that, then your tax home will shift to that city.
How Long Can a Travel Nurse Stay in One Area?
The generally accepted rule of thumb is never to work more than 12 months in any rolling 24-month period in the same area. Additionally, you want to make sure that no area away from your tax home becomes the leading source of your income over a period of multiple years.
This is the trickiest one to deal with because we do not have a clear definition of “area”. For example, let’s say you repeatedly work travel nursing assignments at 2 hospitals that are 50 miles apart from one another.
These hospitals aren’t in the same city. They may not even be in the same metropolitan area.
However, you could reasonably live midway between the 2 hospitals and your commute would be 25 miles to each hospital.
25 miles is definitely a reasonable commute. It would not require you to stay overnight to meet the demands of work. Therefore, your tax home would most likely shift to this area if you worked there for more than 12 months in a 24-month period.
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Again, there is no steadfast rule. Therefore, we can’t provide an exact distance that each hospital you work at needs to be from one another. However, it certainly should be far enough away that you couldn’t reasonably commute to both hospitals from some equidistant point.
How Long Can a Travel Nurse Stay in One State?
A travel nurse can stay in one state indefinitely IF they continue to move to different areas such that they never spend more than 12 months in any rolling 24-month period in the same area. Additionally, you want to make sure that no one area away from your tax home becomes the leading source of your income over a period of multiple years.
Conclusion
As you can see, the rules are fairly straightforward. However, the IRS’s guidelines are not specific with respect to the definition of an “area”. But, the spirit of the rules is quite clear. The bottom line is that travel nurses need to move to different locations fairly frequently in order to maintain their tax homes.
Please note that we are not tax advisers or CPAs. This article is for informational purposes only. Please consult a registered tax professional with experience in the travel healthcare industry in order to discuss your unique circumstances.
