Guides · Housing

Can You Keep a Housing Stipend If You Stay With Family?

By Emre CeylanPublished 27 September 20269 min read

It is one of the most common questions travel nurses and travel therapists ask before an assignment near relatives, and the two answers that circulate — "the stipend is yours, spend it how you like" and "you lose all of it" — are both wrong. The honest answer splits the stipend in two, and then, on the arithmetic, usually comes out in favour of staying with family anyway.

The rule, in the IRS's own words

The untaxed part of a travel package is a per diem allowance paid under an accountable plan. The general rules are in 26 CFR § 1.62-2; the per diem rules specifically are in Revenue Procedure 2019-48. Section 4.02 of that revenue procedure lists the situations in which an allowance is treated as paid for meals and incidental expenses only — with no lodging component at all. One of them is where

"the payor does not have a reasonable belief that the employee will or did incur lodging expenses"

In that case only the amount up to the federal meals-and-incidentals rate for the locality is treated as substantiated. Section 6.06 then deals with the rest: anything paid on top is treated as paid under a nonaccountable plan, which means it is included in your gross income, reported on your W-2 and subject to withholding. Put plainly, a housing stipend paid to someone with no housing cost is wages.

The regulation reaches the same place from the other direction. Under 26 CFR § 1.62-2(d)(3)(i), an arrangement that pays an amount regardless of whether the employee incurs, or is reasonably expected to incur, the business expense does not qualify as an accountable plan at all. The stipend exists to reimburse a cost. No cost, nothing to reimburse.

Two questions that get mixed up

Staying with family touches two separate tests, and most of the confusion comes from treating them as one.

1. Is your tax home intact? This is about the home you are travelling away from. You need a genuine tax home — somewhere you maintain a residence and duplicate living costs — for any of the package to be untaxed. That test is covered in tax home, explained, and who you stay with on assignment has no bearing on it.
2. Are you paying for lodging where you work? This is about the assignment end, and it only affects the housing portion. It is the question this page is about.

Family can also sit at the other end of the trip. If the assignment is close enough to your own home that you are living there, you are not travelling away from home at all, and the whole package — housing and meals — is taxable, whatever the agency calls it. The travel expense rules in 26 U.S.C. § 162(a)(2) apply only "while away from home." How a contract near home compares with travelling is covered in the 50-mile rule and contracts near home.

What it costs, on real numbers

The figures below come 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. In the "housing taxed" column the same $1,000 is paid as taxable wages instead — $57 an hour — and the meals stipend stays untaxed.

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 for those.

It is not the whole $1,000, because the money is still yours. It simply arrives as wages, so income tax and FICA come out of it. In Texas you keep about $714 of every $1,000; in California, where state income tax applies on top, about $626.

The comparison nobody makes

The table makes staying with family look like a loss. It is a loss only against a version of events that is not actually available: living somewhere for free and keeping the housing money untaxed. The real alternative is renting.

Renting keeps the stipend untaxed but costs you rent. Staying with family costs you the tax. So staying with family comes out ahead whenever a place near the assignment would cost more than the tax does:

For scale: the lowest federal lodging rate anywhere in the continental United States — the standard CONUS rate for FY2026 — is $110 a night, about $770 a week. The federal table assumes that lodging in every county costs at least that, which is well above the break-even in every row. For most travellers with family near an assignment, staying with them and paying the tax is simply the better deal.

The mistake is not staying with family. It is pretending you are not.

Run it with your own numbers

If you pay your family rent

If you pay your family a genuine rent, you are incurring a lodging cost, and the housing stipend can be paid under the per diem rules exactly as it would be for a rental. "Genuine" is doing all the work in that sentence. What it looks like in practice:

• An amount close to what a comparable room would rent for locally — not a figure chosen to create the appearance of an expense.
• Paid from your account to theirs, every period, so the record exists without relying on anyone's memory.
• A short written agreement: address, dates, amount.

A token payment — $100 a month "towards utilities" against a $1,000-a-week stipend — is the weak version, in the same way that token rent is the classic weak point at the tax-home end of the trip. There is no published dollar threshold. It is a facts-and-circumstances question, and exactly the kind worth a short conversation with a tax professional who specialises in travel healthcare.

One consequence people forget: the rent is income to your family. The rule that lets a homeowner ignore rent for a dwelling rented for fewer than 15 days a year, in 26 U.S.C. § 280A(g), does not cover a 13-week stay, so the relative receiving it should expect to report it and should ask their own preparer how.

What to say to your agency

The clean route is to tell the agency where you are staying and ask them to restructure the package: a meals and incidentals stipend only, with the housing money moved into the taxable rate. In the example above, that is the $1,000 a week becoming $25 an hour on top of the $32 base.

Expect them to offer somewhat less than the full amount. The agency pays its own share of payroll tax on wages but not on stipends, so moving money from one to the other costs them too. That is a negotiation, not a reason to keep the old structure. A higher taxable rate also does things a stipend never does: overtime is calculated on it, a mortgage lender will count it, and it earns Social Security credit.

What does not help is saying nothing. Not telling the agency does not turn a lodging cost you do not have into one you do; the rules are written around whether the expense is incurred. If the facts come out later, the housing money is treated as wages you did not report — with the tax, interest, and potentially a 20% accuracy-related penalty on the underpayment under 26 U.S.C. § 6662. The exposure does not stay with the agency.

If you are still working out whether the stipend you were quoted is a fair one in the first place, how much a housing stipend should be covers the benchmark, and GSA per diem rates explains the federal table it is measured against.

What this page does not cover

It does not decide whether your own tax home holds up — that is a separate test with its own weak points. It does not work through mixed arrangements, such as part of a contract with family and part in a rental, beyond noting that per diem is assessed day by day, so the answer follows where you actually incur lodging. And it is general information, not advice about your situation; please read the disclaimer. If your package depends on an arrangement like this, a travel-healthcare tax professional is worth far more than they cost.

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