The Travel Nurse's Guide to Overtime, Stipends, and Multi-State Taxes

Travel nursing offers incredible opportunities, but it also creates a uniquely complex tax situation. Here's a breakdown of the key issues: overtime, per diems, and state filings.

Tax-Free Stipends and Per Diems: The "Tax Home" Rule

One of the biggest financial benefits of travel nursing is the non-taxable stipend for housing and meals. However, to legally receive this money tax-free, you must have a "tax home." This is your main place of residence that you maintain and incur expenses for while you are away on assignment. If you are an itinerant worker without a permanent home base, the IRS considers your tax home to be wherever you are currently working, and those stipends become fully taxable.

Overtime Pay vs. Stipends

Your income as a travel nurse is typically split between taxable wages (your hourly rate) and non-taxable reimbursements (stipends). Your overtime pay is calculated based on your taxable hourly rate and is fully taxable as ordinary income. It does not affect your non-taxable stipends. For more information, check out our articles on tax write-offs and self-employment tax.

The Challenge of Multi-State Tax Filing

As a travel nurse, you will likely need to file multiple state tax returns.

• Resident Return: You'll file this in your home state, reporting all income earned everywhere.
• Non-Resident Returns: You'll file one of these for each state you worked in, reporting only the income earned in that specific state.
• Credit for Taxes Paid: To avoid double taxation, your home state will usually give you a credit for the taxes you've already paid to your non-resident states.