CPA guide • 2026 update
The 50-Mile Rule Explained: Can You Be a Local Travel Nurse in 2026?
The travel nurse 50 mile rule can either protect your tax-free income or turn it into fully taxable wages. The upside is big: if you qualify for tax-free stipends, your take-home pay can jump by hundreds of dollars per week. The downside is just as real: if the IRS decides your assignment is effectively local, you could owe back taxes, penalties, and interest. That’s why local travel nursing must be structured carefully in 2026.
The Rules: IRS Guidelines in Plain English
The IRS does not have an official “50-mile rule.” That guideline started in the industry as a conservative screening tool. IRS law focuses on your tax home and whether the assignment is temporary.
What actually matters
- Maintain a valid tax home. You must keep a primary residence, pay ongoing expenses, and return between assignments.
- Keep the assignment temporary. Generally under 12 months in the same area.
- Duplicate expenses. You need housing costs both at home and at the assignment.
- Stay within GSA limits. Stipends above GSA per diem caps become taxable.
- Mileage isn’t a safe harbor. The IRS evaluates facts and circumstances, not a fixed number.
The Math: Doing It Right vs. Doing It Wrong
Here’s a simplified comparison. Assume a 13-week contract, $2,300 weekly gross, and a 24% combined tax rate. The GSA max lodging and meals rates allow a $900 weekly stipend.
| Scenario | Weekly Taxable Wages | Weekly Stipend | Taxable Income | Estimated Weekly Net | 13-Week Net |
|---|---|---|---|---|---|
| Scenario A (Doing It Right) | $1,400 | $900 | $1,400 | $1,064 | $13,832 |
| Scenario B (Doing It Wrong) | $2,300 | $0 | $2,300 | $1,748 (before reclass) | $22,724 (IRS reclassifies $11,700 in stipends) |
What this means: Scenario B may look better upfront, but if stipends are reclassified, you could owe $2,800+ in back taxes plus penalties. Scenario A protects the tax-free portion.
Why the 50-Mile Rule Is Misleading
Many recruiters cite “50 miles” as if it’s a hard IRS standard. It isn’t. In some metro areas, 40 miles could be a different county with true housing duplication, while in rural areas, 70 miles might still feel local. The IRS looks at facts and circumstances, not a fixed number.
Practical 2026 Checklist (CPA Perspective)
- Keep a lease or mortgage at your tax home and pay fair market value.
- Return to your tax home between assignments and keep travel proof.
- Maintain separate housing during the assignment (short-term rental, extended stay, or rented room).
- Track duplicate housing costs (rent, utilities, receipts).
- Verify GSA rates for the assignment location and compare to your stipend.
- Document intent to stay under 12 months in the area.
- Avoid back-to-back local contracts in the same metro area that could be viewed as indefinite.
FAQ: Top Questions About the 50-Mile Rule
Do I need receipts to prove duplicate expenses?
Yes. Housing receipts and proof of ongoing tax home costs are the minimum standard I recommend.
Can I take a local contract and still get tax-free stipends?
Yes, but only if you maintain a tax home and incur duplicate housing costs.
What if I move around the same metro area?
If you continuously work within the same geographic area, the IRS may view it as indefinite.
Final Takeaway
The travel nurse 50 mile rule is not the IRS rule. The real decision hinges on your tax home, temporary assignment status, and duplicated expenses. If you’re doing local travel nursing, treat it like a real travel assignment: maintain your home base, pay for second housing, and document everything.
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