Wait, did I hear a rumor that we get tax-free income as travel nurses? Yes, please. I would like that cake and I would like to eat it. But. Beep, beep, beep- let’s back up. There is no such thing actually. Yes, travel nurses are able to receive tax-free money in addition to their income. It’s there to reimburse them for their travel expenses
Why isn’t this money taxed? It’s not income.
Reimbursements, per diems, allowances, stipends. For travel nurses, these words all pretty much mean the same thing… tax-free money, baby!! This money shows up on your paycheck. It might feel like income. Your recruiter may present this money to you as if it’s like income. Don’t let these things confuse you, travel nurses. Reimbursements are meant to offset the expenses you incur while traveling on assignment. They are not a part of your legal and taxable income.
- Whatever you are making in the TAXABLE hourly part of your pay package breakdown – that is your income. Hello, income.
- Whatever is in the meals, incidentals, lodging, travel reimbursements, etc sections – not income. No sir, you are not. I might see you on my paycheck each week – but you are not classified as legal income.
This is important because: If you are thinking about loans, buying a car, or taking out insurance or disability – your income is what is taken into consideration for approval from the lenders.
Travel nurse tax-free money: no need for receipts?
In some industries, workers and owners have to keep all of their records and receipts in order to be reimbursed for what they spent. Think about people that go on business trips. They are taking pictures of all those receipts after each meal and saving it to deduct for tax time or to bring back to their employers. Oof!
But for some, this just did not make sense. Like truckers and travel nurses! They constantly travel as part of their job and career. It created way too much work for the employees and employers. In order to put an end to some of the paperwork mess, the government decided to come up with a standardized amount for lodging and meals for certain industries. They based the amount on the cost of living index per zip code.
The amounts they came up with are public, and they are what most of our recruiters use to decide what to pay us for our meals and housing in each area. Check out the GSA.com per diem rate online! The table shows a listing of the maximum amount that somebody can receive for housing and meals without an exchange of receipts. (Remember maximum means max an agency is allowed to pay. It’s not what you should necessarily expect to receive. How much you receive is mostly dependent on what the facility is willing to pay you to come work for them. This is called the bill rate.)
What all of this means is if you are a travel nurse, and you qualify, you are now able to receive reimbursement for lodging and meals without having to exchange all that yucky paperwork. (However, most companies DO need receipts for other things like scrubs, travel reimbursement, or licensure.)
Hooray! Less work and mo’ money.
Tax-free reimbursements are a great perk of being a travel nurse. You can make up to 50% more than staff nurses and many times it’s this tax-free perk that allows us to take home so much doe. It’s amazing. It’s fun. It’s freedom!
Cheers to getting paid to travel,
Hey friends. This is really important. I am not a tax advisor and the information I provide on this blog about taxes is not legal advice. Please, don’t treat a blog, Facebook, or your recruiter as your tax advisor. But please, learn some theories here and get some great context to go to your tax advisor with questions about your unique situation!