Travel nurse stipend rules: what the IRS says about tax-free housing and meals
Updated 2026-10-12 · Sources cited below · Not tax, legal or insurance advice
Professional review: pending. Every claim here is cited to the official source below, but it hasn't been reviewed yet by a CPA or enrolled agent who works with travel clinicians. We'll name the reviewer and date here once it has.
The short version
- Housing and meals stipends are per diem allowances. Up to the federal rate for the work location, they're not taxable.
- Anything above the federal rate is wages: it goes in box 1 of your W-2.
- None of it is tax-free unless you have a tax home and the assignment is temporary (realistically one year or less).
- The federal rate is GSA's per diem for that county and month. Look it up by state or test an offer against it.
When an allowance counts as accounted for
Publication 463 says a per diem allowance satisfies the accounting rules for the amount of your expenses only if all of these apply:
- Your employer reasonably limits payments to expenses that are ordinary and necessary for the work.
- The allowance is similar in form to, and not more than, the federal rate.
- You prove the time (dates), place and business purpose of your travel to your employer within a reasonable period.
- You aren't related to your employer.
This is why agencies ask for your tax home address and assignment dates, and why stipends are usually pro-rated for days you don't work.
Over the federal rate
“If your allowance is more than the federal rate, your employer must include the allowance amount up to the federal rate under code L in box 12 of your Form W-2. This amount isn't taxable. However, the excess allowance will be included in box 1.” (Publication 463, chapter 6)
So a $1,500/week housing stipend in an area whose GSA lodging rate is $193/night ($1,351/week) has about $149/week of taxable wages hidden in it. The calculator flags that automatically, using the rate for your exact dates.
Lodging vs. meals
- Lodging: GSA sets a nightly lodging rate per area, and some areas change it by season. Weekly cap = nightly rate × 7.
- Meals and incidentals (M&IE): a flat daily rate per area. Weekly cap = daily rate × 7.
- For your own deductions (not agency stipends), Publication 463 notes there's a standard meal allowance but no standard lodging amount: lodging is deducted at actual cost.
The two rules that make everything taxable
- No tax home. If you don't meet the IRS test, you're an itinerant and never “away from home,” so stipends are income. The tax home guide walks through the three factors.
- Over a year in one place. An assignment realistically expected to last more than a year is indefinite; that city becomes your tax home.
Quick answers
- Are travel nurse stipends tax-free?
- They can be. Under IRS Publication 463, a per diem allowance paid under an accountable plan isn't taxable up to the federal rate for the location, as long as you're traveling away from your tax home on a temporary assignment.
- What if my stipend is more than the GSA rate?
- The amount up to the federal rate isn't taxable. Your employer reports the excess in box 1 of your W-2 as wages, and you pay tax on it like any other pay.
- Is there an IRS limit on the housing stipend?
- The federal per diem lodging rate for the work location is the cap for a tax-free lodging allowance. GSA publishes it by county and month. Multiply the nightly rate by 7 for the weekly maximum.