The Short Answer
CPA guide to the IRS duplicate expense rule, housing stipend audits, and how to protect tax-free stipends in 2026.
Read the full breakdown below for detailed analysis, examples, and actionable steps.
CPA guide • 2026 update
The Truth About "Duplicate Expenses" for Travel Nurse Stipends
Tax-free stipends are powerful, but only if you comply with the IRS duplicate expense rule. When stipends are paid without real duplicated housing costs, the risk of a housing stipend audit rises quickly.
The Rules: IRS Guidance in Simple Terms
- Duplicate expenses are required. You must pay for housing at home and at the assignment.
- Fair market value matters. Token rent without documentation won’t hold up in an audit.
- Temporary assignments only. Once an assignment becomes indefinite, stipends become taxable.
- GSA limits still apply. Stipends above per diem caps are taxable.
The Math: The Cost of Skipping Duplicate Expenses
Assume a 13-week contract with $900/week in stipends and a 24% tax rate.
| Scenario | Tax Home Cost | Assignment Housing | Stipend Tax Status | 13-Week Tax Impact |
|---|---|---|---|---|
| Scenario A (Compliant) | $1,200/month | $1,400/month | Tax-free | $0 additional tax |
| Scenario B (Non-compliant) | $0/month | $0/month | Taxable | ~$2,808 tax owed |
Documentation Checklist for 2026
- Lease or mortgage for your tax home.
- Proof of payment (bank or credit card statements).
- Short-term rental receipts for the assignment.
- Utility bills at the tax home.
- Travel records showing return visits.
FAQ
Do I need receipts for every expense?
Housing receipts are essential. Meals are less strict, but keep weekly summaries.
Can I use an RV as duplicate housing?
Yes, if you can prove payment and use (campground receipts, proof of ownership).
What if I split rent with another traveler?
That’s fine—document your share clearly.
Final Takeaway
The IRS duplicate expense rule is the backbone of tax-free stipends. If you’re not paying for two residences, your stipend is taxable and you’re exposed to a housing stipend audit. Protect yourself with documentation.
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