Tax guide

Travel Nurse Tax Deductions 2026: Complete Guide to Maximize Your Refund

Travel nurses can deduct many expenses, but the rules changed in 2026. Here's what you can still deduct and how to maximize your tax refund.

Understanding Travel Nurse Tax Deductions

As a travel nurse, you incur many expenses that may be tax-deductible. However, the Tax Cuts and Jobs Act (TCJA) eliminated most unreimbursed employee expenses for W-2 employees starting in 2018. But there are still opportunities to reduce your tax burden.

What Travel Nurses CAN Still Deduct (2026)

1. Tax-Free Stipends (The Big One)

The most significant "deduction" for travel nurses isn't actually a deduction—it's tax-free income. If you maintain a tax home and duplicate expenses, your housing and meal stipends are tax-free up to GSA per diem rates.

• Housing Stipend: Tax-free up to GSA lodging rate × 7 days/week
• Meal Stipend: Tax-free up to GSA meals & incidentals rate × 7 days/week
• Requirement: You must maintain a tax home and duplicate expenses

2. State Licensing Fees

If you pay for state nursing licenses out of pocket (not reimbursed by your agency), you can deduct these as an unreimbursed employee expense—but only if you itemize and meet the 2% AGI threshold (rare for most nurses).

Better Strategy: Negotiate license reimbursement into your contract. Many agencies will cover licensing fees.

3. Continuing Education (CE) Credits

CE courses required to maintain your license may be deductible if you itemize, but again, the 2% AGI threshold applies. Most travel nurses won't benefit from this.

4. Professional Memberships

Membership dues for professional organizations (e.g., ANA, specialty associations) may be deductible if you itemize, subject to the 2% AGI threshold.

What Travel Nurses CANNOT Deduct (2026)

The following expenses are not deductible for W-2 travel nurses:

• ❌ Travel to/from assignments (unless you're self-employed)
• ❌ Housing costs (even if stipend doesn't cover full rent)
• ❌ Meals (unless you're self-employed)
• ❌ Scrubs and uniforms
• ❌ Stethoscopes and medical equipment
• ❌ Cell phone bills (unless you're self-employed)
• ❌ Internet at assignment location

Maximizing Your Tax-Free Stipends

Since most deductions are off the table, focus on maximizing your tax-free income:

1. Ensure You Qualify for Tax-Free Stipends

• Maintain a permanent tax home (rent/mortgage + utilities)
• Duplicate expenses (pay for housing at both tax home and assignment)
• Return to tax home between assignments (30+ days annually)
• Keep detailed records (receipts, contracts, mileage logs)

2. Negotiate Stipends Up to GSA Maximums

Many agencies offer stipends below GSA maximums. Use our Stipend Auditor to check if your offer is at the GSA cap. If not, negotiate up to the maximum.

3. Understand Your Blended Rate

Your "blended rate" (total pay ÷ total hours) should reflect both taxable and tax-free income. A higher blended rate with tax-free stipends is better than a lower rate with all taxable income.

State Tax Considerations

Travel nurses face complex state tax situations:

• Tax Home State: You may owe state income tax to your permanent residence state
• Assignment State: You may owe state income tax where you work (unless reciprocity applies)
• No Income Tax States: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, Wyoming

Use our Tax Home Risk Assessment to evaluate your situation.

Record Keeping Requirements

Even if you can't deduct expenses, keep detailed records to prove you qualify for tax-free stipends:

• ✅ Contracts showing stipend amounts
• ✅ Receipts for tax home expenses (rent/mortgage, utilities)
• ✅ Receipts for assignment location housing
• ✅ Mileage logs for travel between tax home and assignments
• ✅ Bank statements showing duplicate expenses
• ✅ Calendar showing time spent at tax home

When to Consult a Tax Professional

Consider hiring a tax professional specializing in travel healthcare if:

• You work in multiple states during the year
• You're unsure about your tax home status
• You've been audited before
• You have complex financial situations (investments, rental properties, etc.)
• You're considering becoming a 1099 contractor

Recommended services: TravelTax.com specializes in travel healthcare tax preparation.

Common Tax Mistakes to Avoid

• ❌ Not maintaining a tax home: Without a permanent residence, all stipends become taxable
• ❌ Not duplicating expenses: You must pay for housing at both locations
• ❌ Poor record keeping: Can't prove tax home status if audited
• ❌ Accepting stipends below GSA max: Leaving tax-free money on the table
• ❌ Filing in wrong states: Can trigger audits and penalties

Final Takeaway

For most travel nurses, the best tax strategy isn't about deductions—it's about maximizing tax-free stipends and ensuring you qualify for them. Focus on:

1. Maintaining a proper tax home
2. Duplicating expenses
3. Negotiating stipends up to GSA maximums
4. Keeping meticulous records
5. Consulting a tax professional when needed