Qualifying for Tax-Free Stipends for Nurses (2023)

November 29, 2023

Let’s discuss financial incentives. Just hearing the word makes you attracted to it as a

professional. Who wouldn’t? As a nurse, you’re constantly in high demand, so we get how interested you are in incentives.

Among these incentives for nurses, tax-free stipends stand out. They’re so advantageous for you. But what exactly are these stipends? Why are they so significant for healthcare professionals?

Let’s learn about it thoroughly below, and let’s also discuss a few qualifications you need to have in 2023.

What are Tax-Free Stipends?

Tax-free money is also like a bonus you receive. As a nurse, this extra money can help you with a lot of things — food, rent, and other travel expenses. If you’re considering travel nursing, this helps as you work in a new place.

Tax-free stipends are especially for places where there aren’t enough nurses. So it helps in a few ways:

Tax-free stipends attract healthcare professionals to work in these tough places.
Tax-free stipends help with moving and traveling expenses, which could be costly.
Tax-free stipends are a sign of thanks for your hard work as a nurse.

What are the Qualifications?

It’s so much easier to manage being a nurse if you know that you have financial backup plans. Tax-free stipends can help you with that. However, tax-free stipends are not for all. Let’s examine the criteria to determine if you can benefit from these tax exemptions.

1. Professional Status

This is the most basic requirement to qualify for stipends. It is actually based on your profession. Although, you have to take note that not just anyone in the field can claim this benefit.

Only those who are:

Registered Nurse (RN) – If you want to become a registered nurse or already are, this is the primary category of availing the stipend.
Licensed Practical Nurse (LPN) – As someone working under the supervision of RNs and doctors, becoming an LPN can also let you benefit from the money.
Nurse Practitioner (NP) – Because of your advanced status and your need to move from place to place, you can also qualify for these stipends.

2. Employment Conditions

For the second qualification, finding the perfect nurse assignment determines eligibility.

If you are:

Working on a Temporary or Per-diem Basis – If you’re working far from home, then this advantage is for you.
Away from One’s Tax Home – By tax home, we mean your primary place of work (despite it being far from where you live). If you’re far from your tax home, you can pay for your additional expenses with tax-free stipends.

3. Time Limitations

Another factor that could affect your qualifications is the duration. If, for example, your assignment is about a year or less, then you are qualified according to the IRS.

If you have been working for more than a year, that place where you’re working will be considered by the IRS your ‘tax home’. Therefore, you can’t avail the stipend.

The 'Tax Home' Concept

As a travel nurse, you always go to different places for work. You might be wondering if that’s your tax home.

Well, a ‘tax home’ is where you usually work, even if it’s not where you live. If you’re working far from your tax home, it makes you qualified to get help with your extra expenses.

Still unsure? Here’s how to check if you’re living in your ‘tax home’:

If you work mainly in one place.
Where do you make most of your money
Where you naturally live or live for a few years.

Knowing your tax home can help you to get tax-free money to help with costs when working away from this ‘tax home’. But it’s always good to talk to a tax expert to understand this better.

Types of Stipends Available for Travel Nurses

We know it feels lonely to be far from home; that’s why we encourage you to make friends as a travel nurse. In addition, there’s one thing even greater – tax-free money.

Here are a few stipends available that you can try to qualify for in 2023:

1. Housing Stipends

Of course, where you’re staying will be a main concern. Housing stipends address this issue and cover the following:

A renting of a home
A renting of an apartment
A renting of a temporary living space

The amount given usually depends on how costly living is in that area. It also depends on how long you will be staying there.

2. Meal and Incidental Stipends

You don’t have to worry about what you’ll be eating and other daily expenses. This type of stipend gets you covered.

This is usually provided daily or weekly. If you’re maintaining a tax home and are currently assigned to a temporary assignment, you can avail this.

Especially if you’re always going to eat out due to your assignment, this one’s for you.

3. Travel Stipends

You might be problematic about your transportation expenses. If where you’re staying is far from your workplace, a travel stipend can assist you with these costs.

Whether it be airfare, mileage, public transportation, or even parking fees, all of you traveling a long distance crossing states or between cities will benefit from this.

4. Other Relevant Stipends in 2023

Apart from the traditional types we’ve mentioned above, there are two more stipends we’d like you to know:

Equipment and Training Stipends – Some healthcare facilities offer money to cover any tools you need as well as equip you with the latest skills.
Wellness and Self-care Stipends – Because mental health is so important, some institutions provide stipends for a few things:
- Wellness programs
- Therapy sessions
- Gym memberships

How to Apply for Tax-Free Stipends

By this time, you might want to try your luck and get this financial benefit. As much as you know the qualifications, there’s still an application process. Below are a few steps to apply for tax-free stipends.

Step 1: Make sure you are qualified

Before heading on to the paperwork and other details, make sure that you are qualified. Qualifications include the one we’ve mentioned above and also:

Make sure your assignments are up to 12 months or less.
Be at a considerable distance from your tax home. If possible, one that’s impossible for daily commuting.

If you achieve both qualities, you need to understand the types of stipends available and see which one can apply to you.

Step 2: Prepare your documents

This step is so important because it can prove that your tax situation needs a form of assistance, especially financially.

The paperwork you need to have is as follows:

Contract or Agreement – Has your assignment, duration, and other terms.
Records of Distance – It includes maps, mileage logs, or any proof showing the distance of your tax home to your work location.
Proof of Expenses – You need receipts or proof of costs for your housing expenses or meals.
Evidence of Tax Home – Whether it be your utility bills or permanent addrtravel nursetax fess on your valid IDs, you must show actual proof.

Step 3: Reporting Stipends on Tax Returns

It’s so important to follow the tax laws of your state. While your stipend is tax-free, you still need to report it. Here’s how:

Separate your pay from your regular wages on your W-2 form.
Consult a tax expert familiar with tax-free stipends in the medical world.
Stay updated with the ever-changing tax laws.

Benefits of Tax-Free Stipends

As you continue to play your role in patient care, it’s time to know the advantages of having tax-free stipends. Will you gain something from it? Yes. Here are three ways:

1. Financial Relief

Traveling to another place means you really don’t know what to expect. The expenses may seem not what you have pictured. The salary you got used to might not be enough to cover the additional costs of being a travel nurse.

With tax-free stipends, you already have a portion of your expenses. You don’t need to feel so burdened about making ends meet. Just think of it as a bonus for your hard work and commitment.

2. Assistance in Covering Costs

Travel nursing assignments come with a lot of expenses. You name it — housing, meals, transportation, and other incidentals.

It’s just a good thing that tax-free stipends allow you to stop digging too deep in your pockets. Whichever state, city, or country you are in, you can have enough for your daily needs.

This targeted financial assistance sees to it that you can focus on your assignment rather than constantly juggling and worrying about your expenses.

3. Encouragement

Some places really need nurses, but it’s hard to get them to come because they might be far away or not have fun things to do.

By giving this tax-free money, it makes you want to work in these places more. So, areas that need help can get it.

Bottom Line

Healthcare is constantly changing. Now, there’s a special money bonus for nurses, especially those who move around for work.

As a healthcare professional, you need to learn about these tax-free stipends. Use it correctly so you can avoid financial stress.

Always remember to think about getting advice from tax experts. Make sure you’re doing everything right. Total Nurses Network can also help you find jobs and guide you into applying for tax-free stipends.

Know the benefits and help yourselves in your careers. Let your hard work pay off with tax-free stipends this 2023!