Travel nursing has its undeniable perks: flexibility, higher salary, and traveling opportunities. But have you even wondered if you could actually enjoy these perks without being too far from home? The answer is yes! Being a travel nurse in your own state is possible, as long as you abide by the rules of the IRS. Here’s a guide on what to remember if you’re considering in-state travel nursing. 

Differentiating "local contracts" from "in-state travel"

Let’s clear up one common point of confusion: working a local contract is different from being an in-state travel nurse. When you take an assignment close enough to your permanent residence that you can comfortably commute and sleep in your own bed every night, you are working a local contract. Your entire paycheck will be paid out as a fully taxable hourly rate because you are not duplicating your expenses.

True in-state travel nursing is when you take an assignment within your home state that is far enough away from your permanent residence that you are required to secure short-term housing. You are still a traveling clinician, but your destination just happens to be in a different city or county within the state you already call home. By qualifying as an in-state traveler who is actively duplicating expenses, you become eligible for those tax-free housing and meal stipends.

The IRS rules: tax homes and duplicating expenses

To unlock the financial benefits of in-state travel nursing, you first need to understand the IRS rules. According to the IRS, a tax home is “the general area where your main place of business or work is located.” Proving that you have a legitimate tax home is a requirement for taking a travel contract and qualifying for tax-free travel nurse stipends.

Once your tax home is established, you must follow the golden rule of travel nursing: duplicating your expenses. To legally receive tax-free stipends, the IRS requires you to actively incur lodging costs at your travel assignment while simultaneously maintaining expenses at your tax home, such as paying rent or mortgage. You can dive deeper into exactly how this works in our guide to travel nurse stipends.

Now, it is time to bust the most common myth in the travel nursing community: the infamous "50-mile rule." Many nurses believe that as long as their contract is exactly 50 miles away from their house, they are legally in the clear. In reality, the IRS does not have a strict 50-mile radius rule; that number is just a standard internal guideline used by many agencies and hospital systems. The actual IRS requirement states that your assignment must simply be far enough away that it requires you to secure rest or sleep away from home to safely perform your job duties.

How to do it right (and avoid an audit)

To legally keep those tax-free travel nurse stipends, you have to strictly abide by the rules of the IRS. Here is how to protect yourself and keep your assignment running smoothly:

• Make sure you maintain your “tax home” by paying rent or a mortgage and ensuring your state ID, voter registration, and car registration are all kept current at your permanent address.
• Whether you use an Airbnb, a hotel, or an apartment lease, keep a record of your receipts and contract for your short-term housing to prove that you are duplicating your living expenses.
• Do not commute or drive back and forth from your shifts. If you are audited and found sleeping at your primary home, you will owe massive back taxes and penalties. It simply isn't worth the risk!

The pros of in-state travel nursing

In-state nursing offers the best of both worlds by giving you the adventure and high pay of traveling without homesickness. Let’s deep dive into the benefits of keeping your career close to home:

• No licensing headaches - Since you already hold a license in your home state, you can skip the cost and waiting period of getting additional nursing licenses.
• Easy access to home - You can easily drive back to your permanent home on your days off to see family and friends, as long as you live at your contract location during your scheduled shift dates.
• Lucrative pay packages - Enjoy the same competitive pay and tax-free stipends as out-of-state travelers while keeping your cost of living familiar.

The challenges to consider

While staying close to home has its perks, in-state nursing isn’t without its challenges. Here are a few potential hurdles to keep in mind before signing a local contract:

• Finding short-term housing - Even if you’re not crossing state borders, you still need to secure a place to stay in a different part of your state. Securing affordable and safe housing for your assignment can be stressful.
• Facility distance rules - Some specific hospital systems have internal policies that prohibit hiring travelers whose permanent address is within 75 to 100 miles, regardless of what your agency allows.
• State income tax - Unlike traveling to a state with no income tax like Texas or Florida, you will still be subject to your home state's income tax laws on your hourly wage.