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Healthcare staffing · Travel nurses · Per diem & stipends
Healthcare staffing companies pay travel nurses, therapists and allied staff housing and meal stipends that are tax-free only under strict IRS rules. When those rules fail, the IRS treats the stipends as wages and bills the agency for years of payroll taxes. We design, review and defend per diem programs for staffing firms.
Serving United States, Virginia, Washington, DC, Maryland.
What we handle
A per diem is excluded from wages only if it is paid under an accountable plan: there must be a business connection (the clinician is traveling away from a genuine tax home for work), the expense must be substantiated (a per diem at or below the federal rate satisfies the amount, but time, place and purpose still must be documented), and any excess must be returned. Miss one requirement and every payment under the plan can become taxable wages.
For the travel year beginning October 1, 2026, IRS Notice 2026-60 sets the high-low per diem at $329 a day for high-cost locations and $230 elsewhere, with meals and incidentals of $86 and $74. Many staffing firms instead use the locality-specific federal rates. Either way, the rate alone does not make a stipend tax-free; the clinician must actually be away from a tax home.
Speak with an advisorWhere we help
A nurse working full time at a Louisville VA hospital claimed Georgia as home. The court held her tax home was Kentucky and disallowed about $32,900 of travel deductions.
A registered nurse held a series of jobs in Los Angeles while the family claimed Georgia. Travel between the two homes was personal, not deductible.
An hourly per diem paid to traveling workers, with no substantiation or return of excess, was held to be taxable wages.
A medical staffing agency's unreported travel reimbursements for therapists drew an IRS employment tax assessment and a worker-classification determination.
Our approach
Review your stipend policy, pay packages, tax home files and a sample of clinician records.
Estimate exposure by year, state and clinician group, including penalties.
Rewrite the plan, documentation and payroll setup; correct prior filings where needed.
Represent the company in IRS and state payroll audits.
Questions
If your question isn't here, call (703) 880-8412 and you'll reach a person.
Only when the clinician is traveling away from a genuine tax home for temporary work and the agency pays under an accountable plan. If the clinician has no tax home, works near home, or the stipend simply replaces pay, the stipend is taxable wages.
It is when part of what would otherwise be taxable pay is relabeled as a tax-free reimbursement, for example lowering the hourly rate when a stipend is added, or paying the same total whether or not the clinician travels. Rev. Rul. 2012-25 says such arrangements fail the accountable plan rules.
Hourly per diem is risky. Courts and the IRS have treated per diem that varies with hours worked, without substantiation or return of excess, as wages, as in Worldwide Labor Support of Mississippi. Daily or weekly amounts tied to days actually away are easier to defend.
No. Many agencies use a distance threshold as an internal policy, but the IRS test is whether the clinician is away from the tax home overnight, not a fixed number of miles.
Under section 162(a), employment expected to last more than one year at a single location is indefinite, not temporary, so stipends for that assignment are generally taxable from the point the expectation changes.
Employer and employee FICA, FUTA, income tax withholding, failure-to-deposit and accuracy penalties, plus interest, usually for every open year and every clinician under the plan, and often parallel state payroll assessments.
Latest updates
Authorized representatives can now make balance-due, amended return, extension, proposed assessment and federal tax deposit payments for business clients online. Appropriate authorization for the client and tax matter is required.
Source: IRS (IR-2026-134)
For 2027 the joint-return standard deduction rises to $33,200, the estate tax basic exclusion to $15,480,000, the annual gift exclusion to $20,000 and the Section 179 expensing limit to $2,640,000. Our advisors recommend revisiting year-end gifting and equipment purchase plans with these figures in mind.
Source: IRS (IR-2026-133)
All 6,576 nominated census tracts, including 2,594 rural tracts eligible for enhanced benefits, become Opportunity Zones on January 1, 2027 for ten years. Investors with capital gains should review the new map before committing funds.
Source: IRS (IR-2026-132)
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