Protouch Staffing has been helping Healthcare Professionals for Direct Hire, Travel & PRN Positions across the nation since 1989. Travel Nursing has remained attractive to nurses at large over the years as they can make more money and they have an opportunity to make non-taxable money. However, it is essential to understand the qualifying criteria to be able to earn non-taxable allowances/stipends. A lot of agencies engage in wrong practices, may be not intentionally, but out of ignorance and lack of awareness. Non-taxable stipends generally include Housing and Meal allowances and the agencies offering these must follow GSA guidelines.
One of the major confusions is ‘Housing Allowance/Stipend”. The most wide-spread norm or rule of thumb is the ’50 miles distance’ rule that for many agencies becomes the base for allowing non-taxable housing. In reality, there is no such rule with IRS. In order to receive a housing allowance tax-free, a traveler must maintain his/her tax-home (generally their perm address) away from the temporary work place. This is to say that if they commute from their tax-home to their work place, they can’t get non-taxable housing allowance irrespective of the distance. Also, the traveler has to incur lodging expenses for temporary overnight stays close to their work place. Lodging expenses might include motel costs, apartment or apartment sharing rent and utilities (gas, electric, and water). Personal expenses like; cable TV, telephone, internet service, etc. don’t qualify as lodging expenses. This rule clarifies one confusion or rather a loophole traveler misuse. Travelers often find places to live with their friends and/or relatives to avoid housing cost and pocket-in the stipends. However, the burden of proof for actual expense lies with them and this can very well invite an IRS Audit.
By Gitesh Pandya