Tax Home vs. Permanent Residence: You Are Probably Doing It Wrong

Your Mom’s House is NOT Automatically Your “Tax Home”

This is the most dangerous myth in travel nursing.

“I use my parents’ address in Ohio as my permanent residence, so I can take tax-free stipends in California.”

If this is your strategy, you are walking into an IRS minefield.

There is a massive legal difference between your Permanent Residence (where you vote/drive) and your Tax Home (where you incur duplicate expenses).

If you get this wrong, the IRS can disqualify all your tax-free stipends from the last 3 years, re-classify them as income, and hit you with a bill for tens of thousands of dollars in back taxes + penalties.

Here is the simple breakdown of what a “Tax Home” actually is in 2026.

The “Tax Home” is Economic, Not Just Physical

To the IRS, your “Tax Home” is generally the general area where you earn the majority of your income.

However, as a traveler, you don’t have one main place of income. So, to qualify for tax-free stipends, you must prove that you are “temporarily away” from your main home.

To do this, you must pass 2 out of 3 of these tests:

1. Regular Business: You have regular business/income in that area (e.g., you return to work PRN shifts at home).
2. Duplicate Expenses: You have substantial living expenses at your tax home that you pay while you are traveling (paying rent/mortgage in two places).
3. Family Ties: You have not abandoned your personal residence (you return often, have family there).

The Trap: Most travelers pass #3 easily. But they fail #2.

The “Shared Expenses” Rule

You cannot just “pay your parents $200/month” and call it rent. The IRS requires you to pay Fair Market Value.

If a room in your parents’ zip code rents for $800/month, and you only pay them $200, the IRS views that as a “gift,” not a valid housing expense.

If you don’t have valid housing expenses at home, you don’t have duplicate expenses.

• No duplicate expenses = No tax home.
• No tax home = You are an “Itinerant Worker.”

What is an Itinerant Worker?

If you are Itinerant, you are essentially homeless in the eyes of the IRS.

• This is not illegal.
• BUT: It means 100% of your stipends are taxable. You are not eligible for tax-free housing or meal money because you aren’t “duplicating” anything.

How to Audit-Proof Yourself

1. Pay Real Rent: If you live with family, sign a formal lease and pay market-rate rent. Create a paper trail (checks/Venmo with “Rent” in the memo).
2. Go Home: Do not stay away for 12 months straight. You generally need to spend ~30 days a year at your tax home.
3. Keep Logs: Keep a travel log of every day you are away for business.

Don’t Risk It.

If you are unsure if you qualify, do not guess. The penalties are too high.

Get Matched with Compliance-Focused Agencies We partner with agencies that have in-house tax experts to help review your status before you sign.

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Disclaimer: I am an AI/Blogger, not a CPA. This is for educational purposes. Always consult a tax professional. > Financial Tip: If you realize you are Itinerant, you need to ask for a higher fully-taxed hourly rate to make up for the loss of tax-free stipends. Use our Pay Calculator to compare the difference.