Debunking the 50 Mile Rule

Before reading this post, you may want to read our previous post that covers nurse pay breakdowns in more detail.

If you’ve been travel nursing for a while, you’ve likely heard of “the 50 mile rule”. It’s a questionable financial tactic travel healthcare professionals commonly discuss when talking about pay and contract details.

As a travel nurse, your pay includes some strategy on behalf of the recruiter/agency who constructed your pay package alongside GSA guidelines.

Those guidelines dictate what an appropriate reimbursement is for housing, meals, and incidentals. This portion of your paycheck comes in stipends. These stipends are tax free, because the government understands/expects the travel nurse is paying duplicate expenses on these elements (mortgage, rent, etc.).

The general misconception is that as long as a nurse lives 50 miles (or more) from the facility of their assignment, they are eligible to receive tax-free housing stipends and commute home after each shift. The nurse can pocket these stipends instead of spending on housing.

This is inaccurate, and can cause trouble for the travel nurse. Here’s why:

  • The housing stipend is tax free because — and only because/if/when — nurses duplicate housing expenses during their travel contract, regardless of the distance from their permanent residence.
  • The stipend is intended to be a financial buffer and support for travel nurses (as a renter or a homeowner) paying taxes for a permanent resident and needs to pay for additional housing while on their travel contract.
  • What the IRS needs to see is that nurses are duplicating expenses with housing in order to work the contact.
  • Nurses need to be able to show at the end of the year they are paying for housing in the area that they’re working and that they’re paying for a taxable permanent address.
  • Meals and incidentals are more “flexible” in this regard (but be sure to save your receipts!)
For clarity: Kamana is not a financial or tax advisory firm. Please consult tax and financial strategies with your own advisors. Those who don’t may find themselves being questioned/audited and subject to penalties and/or fees.