Are you a registered nurse looking for an exciting career that combines your passion for nursing with the opportunity to travel and explore new cities? If so, travel nursing in the USA might be the perfect fit for you! One of the key components of a travel nurse’s compensation package is stipends. In this blog post, we’ll dive into how stipends work for travel nurses in the USA.
What are stipends?
Stipends are additional payments that travel nurses receive on top of their regular hourly wages. These payments are intended to cover various expenses associated with being a temporary traveler, such as housing, meals, and incidentals. Stipends are not considered as wages, and they are typically tax-free, meaning they are not subject to federal income taxes, and in some cases, state and local taxes as well.
Types of stipends for travel nurses
Housing stipend: This is a fixed amount of money that travel nurses receive to cover their housing expenses. It can be used to rent a furnished apartment, stay in a hotel, or rent reimbursement. Housing stipends are typically paid directly to the nurse or can be arranged through us at Compound Healthcare.
Meals and incidentals stipend: This is a daily allowance that travel nurses receive to cover their meals and other incidental expenses, such as transportation, parking, and laundry. The amount of the meals and incidentals stipend is determined by the location of the assignment and is based on the U.S. General Services Administration (GSA) per diem rates for that area.
Travel stipend: Some travel nursing assignments require nurses to travel long distances to reach their destination. In such cases, travel nurses may receive a stipend to cover their travel expenses, such as flights, gas, or tolls.
How do stipends work?
Stipends are usually paid separately from the regular hourly wages, and they are not subject to taxes, which means they are paid in full to the travel nurse. However, it’s important to note that the IRS has specific rules and guidelines regarding stipends, and travel nurses must meet certain criteria to qualify for tax-free stipends. For example, the travel nurse must have a “tax home,” which is their primary residence, and they must incur expenses for lodging and meals while working away from their tax home.
Let’s look at an example of how stipends might work for a travel nurse in Dallas, Texas.
Suppose a travel nurse is assigned to a 13-week contract in Dallas and receives the following stipends:
- Housing stipend: $3,000 per month
- Meals and incidentals stipend: $60 per day
- Travel stipend: $500 for round-trip airfare
Over the course of the 13-week contract, the travel nurse would receive a total of:
- $9,000 in tax-free housing stipends ($3,000 x 3 months)
- $5,460 in tax-free meals and incidentals stipends ($60 x 7 days x 13 weeks)
- $500 in travel stipends
This would amount to a total of $14,960 in tax-free stipends in addition to their regular hourly wages.
Stipends are an essential component of the compensation package for travel nurses in the USA. They are intended to help cover housing, meals, and incidentals while nurses are on assignment away from their tax home. Stipends are typically tax-free, but travel nurses must meet certain criteria and keep accurate records to ensure compliance with IRS regulations.
When it comes to travel nursing in the USA, the earning potential can be lucrative. With a high demand for healthcare professionals in the country, travel nurses can command competitive hourly wages in addition to their tax-free stipends.
As a travel nurse in the USA, you may find that the cost of living can be relatively affordable in many areas compared to other major cities. This means that your stipends may go a long way in covering your housing, meals, and incidentals expenses. You can choose to rent a furnished apartment, stay in a hotel, or even receive a reimbursement for rent using your housing stipend. The meals and incidentals stipend can help cover your daily meals, transportation, parking, and other incidental expenses while on assignment.
It’s important to note that travel nursing stipends are typically paid in addition to the regular hourly wages, which can vary depending on your experience and specialty. However, with the tax-free nature of stipends, travel nurses can potentially earn a higher take-home pay compared to permanent nursing positions.
In conclusion, the earning potential of a travel nurse in the USA, can be attractive due to the tax-free stipends that can help cover housing, meals, and incidentals expenses. By meeting IRS criteria and keeping accurate records, travel nurses can maximize their tax savings and potentially earn a higher take-home pay compared to permanent nursing positions. If you’re considering a travel nursing career, it’s essential to research and understand the specific stipend arrangements offered and consult with a tax professional to ensure compliance with IRS regulations. Happy travels and happy nursing!