Talking Taxes: The Tax Home “Abandonment” Issue

Talking Taxes: The Tax Home “Abandonment” Issue


abandoned home

Guest Article via Joseph Smith @

What is Tax Home “Abandonment”? How does it affect the Travel Nurse?  What can you do to protect yourself?  Joseph Smith from helps make some sense of this confusing issue.

Many travelers have asked us about recently updated agency policies that require a traveler to return home and either work locally or stay at home for 30 to 45 days every two years. The conversation goes along these lines: “You have been traveling for two years. You need to go home for 45 days and work or you will lose your tax home”. There are variations of this conversation, but the policies require the traveler to go home after 2 years of service.

First, this is an Agency rule. Not something from the tax code.

Unfortunately, it is made out to be an IRS rule which is misleading. So why are many agencies adopting this rule? The returns home are an attempt to avoid the “abandonment rule” that is a part of the regulations regarding a tax home.. A tax home is an economic home (not a permanent residence – those are two different concepts). In other words, it is where one works, not where they live. If a person has 1 permanent job, the area of that job is their tax residence whether they drive 1 mile or 100 miles commuting. Due to the temporary nature of their contracts, a traveler does not have a primary job site unless they stay in the same area over a year, or have repetitive assignments in the same area over 2 or more years.

When one does not have a primary area where they earn their income, the tax home can default to the permanent residence provided they pass two of three of the following tests.

1) Have significant income at home

2) Have substantial expenses maintaining their residence which are duplicated while on assignment

3) Have not abandoned their historical area of work and residence

The agency rules requiring a return home are addressing abandonment in criteria #3. A few examples can help explain how this is applied:

Situation 1: Traveler X does not return home for 3 years.

Situation 2: Traveler X returns home 15 days a year for a vacation

Situation 3: Traveler X comes home 30+ days a year

Traveler 1 has a problem. A three year absence without returning home is an abandonment of their home. Going away three years without a return home generally means they will continue the process. Since tax return audit cycles are 3 years (A 4 year old return cannot be audited except in special circumstances), a 3 year audit will reveal continuous life on the road. They then become “iterant” as a lifestyle choice in the eyes of the IRS.

Traveler 2 has a potential problem. Under other areas of the tax code, a principal residence is defined as a place that the taxpayer occupies more than 10% of the rented days. Though a traveler maintaining a tax residence does not rent their home in its entirety, the spirit of the rule still applies. 10% of 365 days is 36-37 days. Returns home of minimal duration do not evidence ones commitment to a residence more than a lack of commitment or abandonment.

Traveler 3 has a substantial time investment at home and more closely follows the 10% rule

It is our experience that Traveler 3 has a lower risk of an adverse audit (not the risk of being audited, but surviving an audit), than the other 2 and we encouraged our healthcare staffing clients to make a point of spending 30 days a year at home if possible. Mobile professionals working in other industries such as the nuclear and engineering allow for different approaches.

While we like to see our clients return home for 30 days a year, this often conflicts with an agency mandate of returning home 45 days every 2 years. As many travelers know, agency rules that establish corporate due diligence before government agencies do not satisfy the traveler’s obligations. Traveler’s often have a higher burden of proof when under audit. Their obligations exceed that of the agency.

So where did the agencies get the 2 year / 45 day rule from? That is the subject of the next article!


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  2. Im a traveler from a small town, to a city 250 miles away in my same state. My parents happen to also live in the city I’m travel nursing to.
    The remainder of the next year I will be in different states, starting in a couple weeks. Okay a few questions….
    1. Am I stuck forever with the small town as my primary home or can I ever switch it to my parents home address?
    2. So is it 30 or 37 days a year, or 45 days every 2 years?
    3. Do I have to go back to the small town for those days or can it just be in the STATE of my primary home?

    So confusing.

    • A tax home and a permanent residence are different things. That one of the reasons that it is confusing.
      1) A Tax home is not a state, it is a metropolitan areas
      2) You can switch to your parents home but I would suggest earning some fully taxed income in the area before traveling from there
      3) 30+days a year is fine to avoid abandonment. The 45 days every 2 years is a requirement imposed by some agencies – it is not part of the tax code, but part of overall compliance for the agency.

      • Do you HAVE to work at home during those “30 days”? Does this only apply if you file separately – I file jointly with my husband and he will remain employed in our home state during our travels.

        • Each person answers for their own tax residence, however, when you have horizontal and lineal family members staying at your permanent home (spouse and kids), the 30 days are less important, though you cannot abandon the home

          • I have adult children living in my permanent home, but I still pay all the bills there. I do not have a mortgage, since my home is paid for. And when I do go home, do I need to work in the area to “prove” by a W-2 that I was there for X amount of time? (Obviously I am a new traveler!☺️)

  3. Returning home entails having to continuosly, biyearly, find a temporary job for 30-60 days to be safe? Or just returning home for this time period? Low populated areas, like where I come from, this would be extremely difficult to find short term employement. On the second note, if we are not required to work during our time home what says we ever went home in the first place? W2’s don’t show days we were employed and not employed.

    • Thank you for responding to my previous question! So, do I still need to return home for around 36 days per year and work, or will my yearly property taxes and bill receipts be sufficient to prove I am not abandoning my home? I do try to return home as often as I can afford to! It truly is a blessing to have my home paid for! But I do have a truck payment! Thank you again!!

  4. Why must it be So difficult.

    I am on assignment across the country and -without getting into the reasons- I will not be able to return home within the year. Last home in november, started this state in march, will hopfully be able to get back home this coming jan or feb.
    I will have been at this current contract for 6 months in september.
    So what is my safest course to take from here? Do I have to become a resident of this new state and go permanent staff? Can I stay as a traveler as long as possible here (I know i have to leave the region after 1 year, is that correct?)

    Thank you for sharing all of your knowlege, Joe. There is so much hear-say floating around.