Debunking the 50 Mile Rule

Recruiter falsifying the 50 Mile Rule

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

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

As a travel nurse, your pay includes some strategy on behalf of the recruiter/agency who constructed your pay package alongside GSA guidelines. It’s important to know how the so called “50 mile rule” will impact your strategy.

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 a facility, 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 so called “50 mile rule” is inaccurate, and can cause trouble for the travel nurse. Here’s why:

  • The housing stipend is tax free if and only if nurses duplicate housing expenses during their travel contract. This is 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. Travel nurses 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.
  • Travel 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 before making a decision as to if the “50 mile rule” is relevant to your situation. Those who don’t may find themselves being questioned/audited and subject to penalties and/or fees.