The 50-Mile Rule: What Happens When the Contract Is Near Home
Sooner or later a good contract turns up close to home — forty miles away, or sixty — and the question travel nurses and travel therapists ask is whether they can take it and keep the stipends. The agency's answer usually comes from a distance check. The answer that matters to your tax return does not involve distance at all.
The short answer
The 50-mile rule is an agency policy, not a tax rule. The IRS does not ask how far away the assignment is; it asks whether your work requires you to sleep away from home. If you commute from home every day, the whole package is taxable, whatever the agency's check says. The useful decision is a different one: how a local, fully taxable offer compares with a travel contract somewhere else once you subtract what that contract costs you in rent.
Where the 50 miles comes from — and where it does not
Agencies and facilities use a distance from your permanent address to decide who counts as a traveller and who they will pay stipends to. Fifty miles is the figure you hear most, but it is a screening policy, and not every agency or facility uses the same number. It is not in the Internal Revenue Code, and Publication 463 — the IRS's own guide to travel expenses — contains no mileage test of any kind, for being away from home or for where your tax home is.
That matters because the check protects the agency's paperwork, not your return. Passing it does not make a stipend tax-free, and failing it does not mean the IRS would have objected. The full list of tax-home myths, this one included, is in tax home, explained.
The test that actually applies
Publication 463 defines travelling away from home in one sentence:
"Your duties require you to be away from the general area of your tax home substantially longer than an ordinary day's work, and you need to sleep or rest to meet the demands of your work while away from home."
The Supreme Court upheld that sleep-or-rest standard in United States v. Correll (1967). Two words in it do the work. "General area": your tax home is not your front door but, in the publication's words, the entire city or general area where you work. And "sleep": if you drive home every night, you were not away, however long the drive. The cost of getting to work from where you live is commuting, which the regulations treat as a personal expense (26 CFR § 1.262-1(b)(5)). And the per diem rules in Revenue Procedure 2019-48 apply only to travel away from home — so a stipend paid to someone who is not away from home has nothing to reimburse.
| Situation | Agency 50-mile check | What the tax rules say |
|---|---|---|
| Assignment 40 miles away, you commute from home daily | Fails | Not away from home. Any stipend would be taxable wages — usually the agency simply offers a local rate. |
| Assignment 60 miles away, you commute from home daily | Passes | Not away from home either. The stipends are taxable wages even though the agency pays them as untaxed. |
| Assignment 60 miles away, you rent near the facility because the work genuinely requires it, and keep paying for your home | Passes | Can qualify if your tax home is real and the assignment is outside its general area — but this is the weakest version of a travel arrangement, and a facts-and-circumstances question. |
| A relative's or friend's address used to clear the distance | Passes on paper | A tax home needs duplicated living costs at a place you genuinely maintain. An address alone establishes nothing. |
What commuting on a travel package costs
Figures from this site's pay calculator. Package: physical therapist, $32 an hour taxable, 40 hours, $1,000 weekly housing stipend, $315 weekly meals and incidentals, $500 travel reimbursement, 13-week contract, single filer, 48 weeks worked a year. The second column is the same package treated as it should be for someone commuting from home: all of it taxable.
| Assignment state | Weekly take-home, travelling | Weekly take-home, commuting from home | Difference per week | Per 13-week contract |
|---|---|---|---|---|
| Texas | $2,389 | $2,005 | $384 | $4,991 |
| Colorado | $2,347 | $1,905 | $442 | $5,746 |
| California | $2,353 | $1,851 | $502 | $6,528 |
Federal income tax, FICA and state income tax only. State payroll premiums such as California SDI and Colorado FAMLI are not included — see the state pages.
If an agency pays the stipends untaxed anyway and the facts later come out, that difference is what gets assessed on your return — plus interest, and potentially an accuracy-related penalty. The same logic applies to staying rent-free with relatives near an assignment, covered in staying with family and your housing stipend.
The comparison that actually decides it
Once the stipend question is settled, a contract near home is simply a local job: every dollar taxable, no second rent. The real alternative is a travel contract somewhere else — where the stipends are untaxed but you pay for a place to live. So the fair comparison is not local pay against the travel package's headline, but local pay against the travel package minus the rent it forces you to pay.
Here is the fully taxable hourly rate a local 40-hour contract needs to pay to leave you with the same weekly take-home as the travel package above, after you have paid for lodging on assignment:
| Rent you would pay on assignment | Texas | Colorado | California |
|---|---|---|---|
| Nothing (headline comparison) | $78.79/hr | $82.01/hr | $85.94/hr |
| $500 a week | $60.59/hr | $62.50/hr | $64.77/hr |
| $770 a week (the standard federal lodging rate, $110 a night) | $50.99/hr | $52.26/hr | $53.67/hr |
| $1,000 a week (the whole housing stipend) | $42.82/hr | $43.54/hr | $44.25/hr |
The first row is the comparison travellers instinctively make, and it is misleading: nobody on a travel contract gets to keep the housing stipend and live somewhere for free. Once lodging is paid, a local offer paying roughly $43 to $65 an hour, depending on the state and the rent, matches this travel package — and that is before counting what travelling costs that this table leaves out: the drive, the unpaid weeks between contracts, extra licences, and a second set of household bills beyond rent. All of those push further in favour of the local offer.
The reverse is also true. If the local rate you are offered sits well below that range, the travel contract elsewhere is worth more even after rent — which is exactly what the stipend is for.
Do not borrow an address
The shortcut people are tempted by is giving the agency a relative's or a friend's address that clears the distance. It does not clear anything that matters. The agency's form is an attestation you sign, and the tax home it describes has to be a place where you genuinely live and carry duplicated costs. If it is not, the stipends were never eligible to be untaxed, and the exposure is yours — see the duplicated-expenses section of tax home, explained.
What to ask the agency
- "What is the local rate for this contract?" Most agencies can quote a fully taxable version. Get it in writing next to the travel package.
- "What distance rule do you and the facility use?" Sometimes the facility, not the agency, sets it, and sometimes it differs between the two.
- Then run both through the pay calculator — the travel package as quoted, and the local rate with the stipends set to zero — and subtract your real rent from the travel result.
What this page does not cover
It does not decide whether a particular assignment is outside the general area of your tax home — that depends on your facts, not a map. It does not cover whether your tax home itself holds up; that is the three-factor test in tax home, explained. And it is general information, not advice about your situation; please read the disclaimer. For an arrangement close to the line, a tax professional who specialises in travel healthcare is worth far more than they cost.
Sources
- Internal Revenue Service, Publication 463, Travel, Gift, and Car Expenses — definition of travelling away from home; tax home as the entire city or general area of your work; no mileage test.
- United States v. Correll, 389 U.S. 299 (1967) — the sleep-or-rest rule.
- 26 CFR § 1.262-1(b)(5) — commuting costs are personal expenses.
- 26 U.S.C. § 162(a)(2) — travelling expenses while away from home.
- Internal Revenue Service, Revenue Procedure 2019-48 — per diem allowances for travel away from home.
- U.S. General Services Administration, FY2026 per diem rates — standard CONUS lodging rate of $110 a night.
- Take-home figures and break-even hourly rates computed with this site's travel pay calculator on 2026 federal and state parameters; inputs stated above the tables.
Compare your two offers
Run the travel package and the local rate through the pay calculator, then subtract what you would really pay for a place near the travel assignment. The bigger number after rent is the better offer.