Travel Nurse Stipend Explained: Taxable vs. Non-Taxable Pay

Introduction: What Is a Travel Nurse Stipend?

Disclaimer: This guide is for educational purposes only and does not constitute tax advice. Consult a qualified CPA or tax professional for guidance on your specific situation.

A stipend is a payment your travel nurse agency provides to reimburse you for the extra living expenses you incur while working away from home. Think of it this way: because you are maintaining a residence at your permanent home and also paying for housing, food, and daily necessities at your assignment location, you are duplicating expenses. Stipends exist to offset that financial burden.

Here is the part that makes stipends so valuable: when structured correctly and when you meet IRS requirements, stipends are tax-free. That means the money goes straight into your pocket without federal or state income tax being withheld. For most travel nurses, stipends represent the single largest financial advantage of travel nursing over staff positions.

But there is a catch, and it is a big one. Your eligibility for tax-free stipends hinges entirely on whether you maintain a qualifying tax home. Without one, every dollar of your stipend becomes taxable income, and your pay package suddenly looks very different.

This article breaks down every type of stipend, explains the tax rules in plain language, walks through real-world scenarios, and shows you how to protect your tax-free status.

Types of Stipends in Travel Nursing

Housing Stipend

The housing stipend is designed to cover your rent or lodging costs at your temporary assignment location. It is almost always the largest stipend component in your pay package, often ranging from $1,000 to $3,000 or more per week depending on the location.

Agencies determine your housing stipend based on GSA (General Services Administration) per diem lodging rates for the county where your assignment is located. The GSA publishes maximum lodging rates for every county in the United States, and these rates serve as the ceiling for tax-free reimbursement.

For example, if the GSA lodging rate for your assignment county is $150 per day, your maximum tax-free weekly housing stipend would be around $1,050 (7 days x $150). Some agencies offer amounts right at the GSA ceiling, while others offer less. In rare cases, an agency might offer more than the GSA rate — if that happens, the excess amount may be taxable.

You will typically have the choice between taking the housing stipend and finding your own housing, or having the agency arrange housing for you. Each approach has pros and cons. Taking the stipend gives you control and the chance to pocket the difference if you find affordable housing. Agency-provided housing is hands-off but means you forfeit the stipend. For a deeper comparison, check out our guide on housing stipend vs. agency housing.

Meals & Incidentals (M&IE) Stipend

The M&IE stipend covers your daily food costs, tips, dry cleaning, and other small expenses incurred while away from home. The GSA publishes tiered M&IE rates that currently range from approximately $59 to $79 per day depending on the cost of living in your assignment area.

Agencies handle M&IE differently. Some pay it as a separate line item on your pay stub, while others bundle it together with the housing stipend into a single “combined stipend.” Either approach is fine from a tax perspective, but knowing the breakdown helps when you are comparing pay packages across agencies.

M&IE is sometimes calculated daily and paid weekly, or it may appear as a flat weekly or biweekly lump sum. The method of calculation does not affect the tax treatment — what matters is that the total amount does not exceed GSA rates.

Travel Reimbursement

Travel reimbursement covers the cost of getting to and from your assignment location. This can come in several forms: a flat dollar amount (such as $750 each way), reimbursement based on the IRS standard mileage rate, or reimbursement for actual flight costs.

The IRS standard mileage rate for 2026 provides a per-mile deduction that covers gas, depreciation, and vehicle wear. If your agency reimburses you at or below this rate, the reimbursement is generally non-taxable.

Keep your receipts and documentation for all travel expenses, even when the reimbursement is a flat amount. Good records protect you in case of an audit.

Taxable vs. Non-Taxable: The Core Distinction

This is the most important section in this article. Understanding the difference between taxable and non-taxable stipends can be worth thousands of dollars per contract.

Non-taxable stipends are payments that reimburse you for legitimate, duplicated expenses while you are working away from your tax home. When your stipends are non-taxable, no federal income tax, state income tax, Social Security, or Medicare is withheld. The money is yours, in full.

Taxable stipends are treated the same as regular wages. They show up on your W-2, and all applicable taxes are withheld. Your take-home pay drops significantly.

The IRS treats stipends as non-taxable only when all of the following conditions are met:

You maintain a legitimate tax home — a permanent place of residence where you incur real living expenses.
You have duplicated expenses — you are paying for your tax home and simultaneously paying for lodging and meals at your assignment location.
The stipend amounts do not exceed GSA rates for the assignment location.
The payments are made under an accountable plan — meaning they have a clear business purpose and the agency maintains proper documentation.

If any of these conditions is not met, the IRS considers your stipends taxable income. The most common disqualifier is not having a tax home.

It is critical to understand that tax-free stipends are not free money. They are reimbursements for real expenses you are incurring. If you do not actually have duplicated expenses (because you have no permanent home), you are not entitled to the tax-free treatment, no matter what your agency tells you.

The Tax Home Connection

Your tax home is the linchpin of your entire stipend structure. Without a qualifying tax home, every stipend dollar becomes taxable, and the financial advantage of travel nursing shrinks dramatically.

The IRS defines your tax home as your regular place of business or post of duty, regardless of where you maintain your family residence. For travel nurses, who change assignments every few months, your tax home is generally the location of your permanent residence — the place you return to between assignments and where you maintain real, ongoing living expenses.

Three Requirements for Maintaining a Tax Home

To have a qualifying tax home, you generally need to satisfy at least two of these three IRS factors:

You perform part of your work in the area of your main home, or you have regular employment in the area. For travel nurses, this can mean picking up PRN shifts at a local hospital when you are home between assignments.
You have duplicated living expenses. You pay for housing at your tax home (mortgage, rent, utilities) while also paying for temporary housing at your assignment location.
You have not abandoned the area. You still use the tax home address, return to it regularly, and have not effectively moved away permanently.

Common Tax Home Setups

The strongest tax home situation is owning a home that you maintain with a mortgage, utilities, and regular returns between contracts. Renting a room or apartment at your tax home address also works, as long as you are paying fair-market rent and can document it.

A common gray area is living with family rent-free. To strengthen this arrangement, many travel nurses pay fair-market rent to their family member, documented with a lease agreement and cancelled checks. This creates a clear paper trail for the IRS.

What Disqualifies You

If you sold your home, let your lease expire, and now live exclusively on the road with no permanent address, you likely do not have a tax home. In this case, your assignment location becomes your tax home, and your stipends are fully taxable.

For a detailed breakdown of how to establish and maintain a tax home, read our complete tax home guide. You can also take the tax home quiz to quickly assess your status.

How Stipends Appear on Your Pay

Understanding where stipends show up — and where they do not — prevents confusion and costly mistakes.

On your weekly paycheck, stipends typically appear as separate line items labeled “housing stipend,” “M&IE,” “per diem,” or similar terms. They are listed separately from your taxable hourly wages.

On your W-2, non-taxable stipends do not appear. Your W-2 only reports taxable wages. This is why travel nurses often have W-2s showing surprisingly low income relative to their actual earnings — the tax-free stipends are simply not reported as income.

This has a real-world implication: when you apply for a mortgage or car loan, the lender looks at your W-2 income. If most of your compensation comes from stipends, your W-2 may not reflect your actual earning power. Some lenders understand travel nurse pay; many do not. It is worth finding a lender who is familiar with the travel nursing pay structure.

For a deeper dive into reading your paycheck, check out our guide on how to read your travel nurse pay stub.

Common Stipend Scenarios

Scenario 1: Nurse With a Mortgage Back Home

Sarah owns a home in Nashville where she pays a $1,400 monthly mortgage and maintains utilities. She takes a 13-week ICU assignment in Phoenix. Her agency offers her a $1,540 weekly housing stipend and a $406 weekly M&IE stipend.

Because Sarah maintains her Nashville home, returns there between assignments, and has clear duplicated expenses (mortgage in Nashville plus temporary housing in Phoenix), her tax home status is solid. Her stipends are non-taxable.

Over a 13-week contract, Sarah receives roughly $25,298 in tax-free stipends ($1,946 x 13 weeks). If those same stipends were taxable at a 25% effective rate, she would lose about $6,324 to taxes. Her tax home is saving her more than $6,000 per contract.

Scenario 2: Nurse Who Travels Full-Time With No Permanent Home

Jake sold his condo two years ago and has been traveling nonstop since. He moves from assignment to assignment, staying in furnished apartments, and does not maintain a permanent residence anywhere. He has no mortgage, no lease, and no address he regularly returns to.

Jake does not have a qualifying tax home. His stipends are fully taxable. If his agency is paying him $1,800 per week in stipends, that entire amount is treated as taxable wages, subject to federal income tax, state income tax, Social Security, and Medicare.

Jake’s agency should be reporting these stipends as taxable income and withholding taxes accordingly. If the agency is not doing this, Jake will face a large tax bill — and potentially penalties — when he files his return.

Scenario 3: Nurse Living With Family Rent-Free

Maria lives with her parents between assignments. She does not pay rent or a mortgage, and her parents cover the household expenses. She wants to take travel assignments and receive tax-free stipends.

This is a gray area. Maria can strengthen her tax home claim by paying her parents fair-market rent — say, $800 per month for a room in their house. She should have a written lease agreement and make payments by check or bank transfer so there is a clear paper trail. She should also return to her parents’ home between assignments and use that address as her permanent address.

With proper documentation, Maria can establish a defensible tax home. Without it, she is in a weaker position if audited.

Mistakes That Put Your Stipends at Risk

These are the most common errors I see travel nurses make with their stipends. Any one of them could result in back taxes, penalties, and interest.

Failing to maintain a tax home. This is the number one mistake. If you let your lease expire, stop paying rent at your permanent address, or effectively abandon your tax home, your stipends become taxable. Review your tax home status at least annually.

Not keeping receipts or documentation. The IRS can ask you to prove that you maintained a tax home and incurred duplicated expenses. Keep copies of your lease or mortgage statement, utility bills, rent receipts, and records showing you returned to your tax home between assignments.

Taking assignments only in one metro area. If all of your assignments are within commuting distance of the same city, the IRS may argue that city is your tax home — not your permanent residence elsewhere. This could disqualify your stipends from tax-free treatment.

Accepting inflated stipends that exceed GSA rates. If your agency offers stipends significantly above the GSA rate for your assignment location, the excess may be taxable and could trigger IRS scrutiny. Always check the GSA rate for your assignment county.

Not filing state taxes properly. Many travel nurses work in multiple states during a single year and need to file returns in each one. Failing to file in a state where you earned income can lead to penalties and interest. A CPA who specializes in travel nursing can handle multi-state filing efficiently.

How to Maximize Your Stipend Value

Once you understand the rules, there are legitimate strategies to make the most of your stipends.

Choose assignments in high-GSA-rate areas. Major metro areas and popular cities tend to have higher GSA lodging rates, which means higher tax-free stipends. An assignment in San Francisco or New York City will typically come with a significantly higher housing stipend than one in a rural area.

Compare housing costs to your stipend. If the GSA rate for your assignment area yields a $1,500 weekly housing stipend but you can find a clean, comfortable room for $800 per week, you pocket the $700 difference tax-free. Many experienced travel nurses are skilled at finding affordable housing through roommate situations, extended-stay hotels with negotiated rates, or off-season rentals.

Negotiate stipend amounts. Stipends are not always set in stone. If you know the GSA rate for your assignment area and your recruiter is offering less, you can ask for an increase. Come prepared with the GSA data — recruiters respect nurses who do their homework.

Keep meticulous records. Good documentation is your best protection. Use a dedicated folder (physical or digital) for each assignment with copies of your lease, pay stubs, housing receipts, and travel records. If you are ever audited, organized records make the process straightforward.

Use the pay calculator to see exactly how stipend amounts affect your total take-home pay under different scenarios.

FAQ: Travel Nurse Stipends

Do I have to spend my entire stipend on housing?

No. The stipend is yours to use as you see fit. If you receive a $1,600 weekly housing stipend and find housing for $1,000 per week, you keep the $600 difference. There is no IRS requirement that you spend every dollar of your stipend on housing. The stipend amount is based on the GSA rate for the area, not your actual housing cost. This is one of the key ways experienced travel nurses maximize their income.

Can I pocket the difference if I find cheap housing?

Absolutely, and this is one of the most effective financial strategies in travel nursing. Many nurses find affordable housing through roommate arrangements, negotiated extended-stay hotel rates, or renting a room instead of a full apartment. The difference between the stipend and your actual housing cost is yours to keep, and because the stipend is tax-free (assuming you have a qualifying tax home), that pocketed difference is also tax-free. Just make sure your stipend does not exceed the GSA rate for your area.

Are stipends the same at every agency?

No. Different agencies offer different stipend amounts for the same assignment location. This is because each agency has a different bill rate arrangement with the facility and a different margin structure. One agency might offer a higher housing stipend but a lower base rate, while another does the opposite. This is exactly why comparing pay packages across agencies is so important. Always look at total compensation, not individual line items.

What happens to my stipend if my contract is cancelled?

This depends on your contract terms. Most contracts stop stipend payments when the contract ends, whether that is the planned end date or an early cancellation. Some contracts include a guaranteed hours or guaranteed weeks clause that may protect you for a limited time after cancellation. Read your contract carefully before signing, and pay close attention to the cancellation and guaranteed hours language.

Do stipends count as income for a mortgage?

Generally, no. Non-taxable stipends do not appear on your W-2, and most traditional lenders only consider W-2 income when evaluating mortgage applications. This can be frustrating because your actual take-home pay may be much higher than what your W-2 shows. However, some lenders who specialize in working with travel nurses understand this dynamic and may consider your contract history and total compensation. If you are planning to buy a home, start working with a travel-nurse-friendly lender well before you are ready to apply.

Key Takeaways

Stipends are tax-free reimbursements — but only if you maintain a qualifying tax home. No tax home means fully taxable stipends and thousands less in your pocket.
Three types of stipends make up most travel nurse packages: housing, M&IE, and travel reimbursement. Know the GSA rate for each.
Documentation is your best protection. Keep records of your tax home expenses, lease agreements, and housing costs at every assignment.
Stipend amounts vary by agency and location. Always compare total compensation packages, not just stipend line items.
Use the pay calculator to model how different stipend amounts and tax scenarios affect your actual take-home pay.

Affiliate Placement Notes

Tax software affiliate link in the “Tax Home Connection” section
CPA referral link in the “Mistakes That Put Your Stipends at Risk” section
Pay calculator CTA in the “Key Takeaways” section