Maximizing Housing Allowance For Travel Nurses

Travel nurses are often given the option of agency-provided housing or a housing stipend. A housing stipend is a sum of money provided by the agency to cover the cost of housing while on assignment. This is a tax-free allowance, and any money saved from the stipend can be kept by the nurse. The amount of the stipend varies depending on location, agency, and other factors.

Agency-provided housing

Benefits of Agency-Provided Housing

• Simplicity: The agency takes care of everything related to housing, including furniture rental, utilities, and even housewares like linens and dishes (usually for an extra fee).
• Housing Availability: Agencies have access to discounts and long-term leases that may be inaccessible to travel nurses, especially in smaller cities with limited housing options.
• Better Prices: Agency-provided housing may offer better rates than what you can find on your own, especially for furnished, short-term leases in desirable locations.
• Better Treatment: Landlords and property managers may be more attentive when dealing with a large corporate staffing agency rather than an individual renter.
• No Money Upfront: You don't have to worry about security deposits or other upfront costs as the agency covers these expenses.
• Safeguard for Cancellations: If your assignment gets cancelled before your lease is up, you won't be responsible for any additional costs.

Drawbacks of Agency-Provided Housing

• Limited Control: You may have limited choices regarding the location and amenities of your housing. While you can request specific accommodations, there is no guarantee that the agency will be able to meet all your preferences.
• Potential for Modest Accommodations: While agency-provided housing includes basic furniture, linens, and dishes, utilities, TV, and internet are usually not covered and would be an additional expense.

How to Get Agency-Provided Housing

If you decide that agency-provided housing is the best option for you, your travel nursing agency will typically have an internal housing department that handles these arrangements. They will work to secure a short-term lease and coordinate any necessary rentals or utilities.

Important Considerations

• Understand the Contract: Make sure you carefully review the contract and pay package offered by the agency. The additional money beyond the taxable hourly rate often falls into housing and cost-of-living stipends, which are not taxed.
• Know Your Priorities: Consider what is most important to you in terms of location, amenities, and cost. While agency-provided housing may be more convenient, it may not always meet all your preferences.
• Be Upfront with Your Recruiter: Communicate your needs and preferences clearly to your recruiter. If you have any special requirements, such as pet-friendly housing or travelling with family, be sure to discuss these upfront.

Tax-free stipend housing

Travel nurses are usually offered a choice between company housing or a housing stipend. They do not get both. If they take the company housing option, the agency takes care of everything related to housing. If they take the housing stipend, they are responsible for finding, securing and paying for their own housing.

The amount of the housing stipend varies depending on the location and specific contract. It is typically adjusted based on the cost of living in the region. The stipend may be provided as a weekly or monthly total.

To qualify for a tax-free stipend, travel nurses must meet certain requirements. They must have a legitimate tax home and be travelling away from that tax home for work. They must also be incurring an expense for housing.

The tax-free stipend is a great benefit for travel nurses as it helps maximise their earnings while on assignments. However, it is important to keep in mind that not every traveller qualifies for stipends, and there may be some confusion around the eligibility criteria. It is also important to note that stipends are not taxed, so travel nurses will need to pay income taxes on their hourly salary.

Stipend vs. per diem

Per diem, meaning "per day" in Latin, is a fixed daily allowance paid by an employer to an employee to cover travel expenses, including lodging, meals, and incidental costs. The General Services Administration (GSA) sets per diem rates for travel within the contiguous United States and Washington, D.C., while the Department of Defense determines rates for Alaska, Hawaii, and U.S. territories, and the State Department sets rates for foreign travel. Per diem rates are based on the cost of living in each area and are updated annually.

A stipend, on the other hand, is a fixed amount of money paid by an employer to an employee, typically on a regular basis such as monthly or weekly. Stipends are often used in academic and research settings to cover living expenses. While per diem is more commonly used for expenses incurred while travelling away from home, stipends are usually broader in scope and less rigidly calculated.

In the context of travel nursing, agencies often offer housing stipends to nurses working on temporary assignments. These stipends are intended to cover the cost of housing during the assignment and are usually paid in addition to the nurse's regular salary or wages. The specific amount of the housing stipend can vary widely depending on factors such as the agency, the location of the assignment, and the time of year.

Nurses typically have the option to choose between agency-provided housing or a housing stipend. Agency-provided housing is arranged by the agency and may include furniture, utilities, and other amenities. With a housing stipend, nurses are responsible for finding and paying for their own housing. This option offers more flexibility and control over living arrangements but also comes with financial risks, such as the potential for contract cancellation or missed shifts.

Per diem rates and housing stipends are similar in that they both provide reimbursement for travel or housing expenses. However, per diem rates are usually daily allowances for a range of expenses, while housing stipends are typically provided as a lump sum specifically for housing costs. Additionally, per diem rates are established by the GSA and other government agencies, whereas housing stipends are determined by individual travel nursing agencies based on factors such as the bill rate and IRS guidelines.

Tax implications

Travel nurses are paid differently from staff nurses. They receive a base hourly pay that is taxed and additional non-taxed "payments" that make up their "total pay". These additional payments are typically reimbursements for expenses incurred while doing the job, such as meals, housing, and work-related expenses.

The amount of the housing stipend varies depending on the travel nurse agency and the location of the assignment. The cost of living in different states varies, so the location of the assignment will play a significant role in determining the dollar amount of the housing stipend.

Travel nurses must be able to prove that they have a "tax home" to the IRS to avoid being taxed on reimbursement payments. The IRS defines a tax home as "the entire city or general area where your main place of business or work is located, regardless of where you maintain your family home." There are two main ways to qualify for a tax home:

• If your primary area of residence is also your main area of income, which typically does not apply to travel nurses.
• You visit your primary residence at least once every 12 months and can prove that you are paying for expenses to maintain your primary home.

If travel nurses cannot prove that they have a tax home, they will be taxed on the stipend payments they receive as part of their travel nurse pay package.

Travel nurses should also be aware of the rules regarding the length of time they can work in the same place and still qualify for tax-free stipends. Generally, housing and meal stipends are only considered tax-free if the expenses are incurred while the nurse is away from their tax home for work. The work assignment must also be temporary, typically lasting less than 12 months. If the assignment is expected to last longer than 12 months, the stipends may be considered taxable income.

To maintain their tax home and continue to qualify for tax-free stipends, travel nurses must duplicate living expenses, such as rent or mortgage, utilities, and other home maintenance expenses. They should also maintain their driver's license, voter registration, and car registration in their home state.

It is important to note that travel nurses may be subject to state income taxes in addition to federal taxes. They may need to file a non-resident tax return in every state they have worked, as well as the state they consider their permanent tax home.

Navigating the tax implications of travel nursing can be complex, and it is always recommended to consult with a tax professional to ensure compliance with the applicable laws and regulations.

Saving money

Understand the Housing Stipend

The housing stipend is a sum of money provided by your agency to cover your housing costs while on assignment. This is usually offered as an alternative to agency-provided housing. It's important to note that the stipend is typically calculated based on the average cost of living in the region and may not always cover suitable housing in the area. Therefore, it's crucial to research the cost of living in your desired location before deciding.

Compare Agency-Provided Housing and the Housing Stipend

When deciding between agency-provided housing and the housing stipend, consider the following:

• Agency-provided housing can be less stressful as the agency handles all the arrangements, including furniture, utilities, and sometimes even cable and internet.
• With the housing stipend, you have more control over where you live and how you want to live. You can choose the location, amenities, and whether you want roommates or not.
• The housing stipend gives you the opportunity to save money. If you find housing that costs less than the stipend, you can pocket the difference. However, keep in mind that you will be responsible for finding and paying for your own housing.

Understand the Requirements for the Housing Stipend

To qualify for the non-taxable housing stipend, you must meet certain requirements, including having a legitimate tax home that is different from your assignment location and incurring actual housing expenses. Additionally, you need to demonstrate that you are travelling away from your tax home for work, and you may need to provide proof of your expenses.

Evaluate the Entire Pay Package

When considering a travel nursing job, don't focus solely on the housing stipend. Evaluate the entire pay package, including the hourly rate, benefits, and other compensation. Some agencies may offer a lower stipend but higher taxable wages, or vice versa. Look at the big picture to determine if the job fits your budget and financial goals.

Be Aware of Potential Risks

Choosing the housing stipend option comes with certain risks. For example, if you sign a lease and your contract gets cancelled, you could be responsible for the remaining rent. On the other hand, if you go with agency-provided housing, the agency typically absorbs the costs in the event of a contract cancellation. Weigh the benefits and risks of each option before making a decision.

Frequently asked questions