Nurse Tax Deductions 2026: Complete Guide for RNs, Travel Nurses, and Healthcare Workers

Published: January 24, 2026 Tax Year: 2026

A Message from Slava

Nurses work incredibly demanding jobs—12-hour shifts, weekends, holidays—and many pay for their own scrubs, continuing education, and professional licenses. The tax rules for nurses changed significantly in 2018, and many healthcare workers don't realize which deductions they can still claim.

Here's the key distinction: W-2 employees (staff nurses at hospitals) lost most deductions after the 2017 Tax Cuts and Jobs Act. But travel nurses, per diem nurses, and self-employed nurses still have significant tax deductions available.

This guide covers the rules for both employee nurses and travel nurses, with specific strategies for maximizing your tax savings.

Executive Summary: Nurse Tax Deductions for 2026

Key Deductions by Employment Type:

Expense	W-2 Staff Nurse	Travel Nurse (W-2 with stipends)	Self-Employed Nurse
Scrubs/Uniforms	❌ Not deductible	❌ Not deductible	✅ 100% deductible
License fees	❌ Not deductible	❌ Not deductible	✅ 100% deductible
CME/Education	❌ Not deductible*	❌ Not deductible*	✅ 100% deductible
Stethoscope/equipment	❌ Not deductible	❌ Not deductible	✅ 100% deductible
Travel stipends	N/A	✅ Tax-free if rules met	N/A
Mileage	❌ Not deductible	Varies	✅ 72.5¢/mile

*May qualify for education credits

Tax Savings Potential for Travel Nurses:

For a travel nurse earning $100,000 with proper tax home:

Tax-free housing stipend:              $24,000
Tax-free M&IE stipend:                 $12,000
Total tax-free income:                 $36,000

Tax savings (not taxed at 24%):         $8,640

Legal Basis: IRC Section 162, IRS Publication 463, IRS Publication 529

Nurse tax deductions with IRS limits

W-2 Staff Nurses: What You Can and Can't Deduct

The 2018 Change That Affected Nurses

Before 2018, W-2 employees could deduct unreimbursed job expenses (scrubs, license fees, CEU costs) on Schedule A if they exceeded 2% of adjusted gross income.

After the Tax Cuts and Jobs Act (2018-2025+): These deductions are suspended for W-2 employees. You can no longer deduct:

Scrubs and uniforms
Stethoscopes and medical equipment
License renewal fees
Continuing education (as an employee expense)
Professional memberships
Work shoes

What W-2 Nurses CAN Still Claim

✅ Education Credits:

Lifetime Learning Credit: Up to $2,000 for tuition/courses
Applies to qualifying courses at eligible institutions

✅ Health Insurance (if applicable):

HSA contributions
Pre-tax benefits through employer

✅ State Tax Deductions:

Some states (CA, NY, others) still allow unreimbursed employee expenses
Check your state's rules

Travel Nurse Tax Rules: Understanding Stipends

Travel nurses have unique tax situations. When done correctly, a significant portion of your compensation can be tax-free.

Tax-Free Stipends: How They Work

Travel nurses typically receive:

Taxable hourly wage (reported on W-2)
Tax-free housing stipend (not reported as income)
Tax-free meals & incidental expenses (M&IE) stipend

The stipends are tax-free because they reimburse you for "duplicating" living expenses—maintaining a home AND living in a temporary location.

The Critical "Tax Home" Requirement

To receive tax-free stipends, you MUST maintain a tax home. This is the most important concept for travel nurses.

IRS Definition of Tax Home: Your tax home is your regular place of business or post of duty, regardless of where you live.

To have a tax home, you must:

✅ Maintain a residence in your home area that you pay for (rent, mortgage, or fair rent to family) ✅ Return regularly to your tax home (at least once every 12 months) ✅ Have duplicate expenses (paying for both your permanent home AND temporary housing)

What Qualifies as Maintaining a Tax Home

Situation	Tax Home Status
Pay rent/mortgage on apartment while traveling	✅ Valid tax home
Pay fair market rent to live with family	✅ Valid tax home
Rent out your home while traveling	❌ May lose tax home
No permanent residence, move contract to contract	❌ No tax home ("itinerant")
Use storage unit + P.O. box only	❌ No tax home

If You DON'T Have a Tax Home

If the IRS determines you don't have a valid tax home, your stipends become fully taxable. This can result in:

Owing back taxes on years of stipends
Penalties and interest
Potential audit issues

This is serious. Many travel nurses unknowingly violate these rules.

Calculating Travel Nurse Tax Savings

Example: Proper Tax Home Structure

Total compensation:                   $100,000
Breakdown:
  Taxable wages:                       $64,000
  Tax-free housing stipend:            $24,000
  Tax-free M&IE stipend:               $12,000

Taxable income:                        $64,000 (not $100,000)

Tax on $64,000 (22% bracket):          $14,080
Tax if fully taxable (22% on $100k):   $22,000

Tax savings from stipends:              $7,920

Example: No Tax Home (Itinerant)

Total compensation:                   $100,000
All income is taxable:                $100,000

Tax on $100,000 (22% bracket):         $22,000
Plus potential penalties for prior years...

Per Diem and Agency Nurses

Per diem nurses and agency nurses who are W-2 employees follow the same rules as staff nurses—limited deductions.

However, if you work as a 1099 independent contractor (which is rare but possible for certain nursing roles), you can deduct:

✅ Deductible for 1099 nurses:

Scrubs and uniforms (100%)
Stethoscope and medical equipment (100%)
License fees (100%)
Continuing education (100%)
Mileage to assignments (72.5¢/mile)
Professional liability insurance (100%)
Professional memberships (100%)

Self-Employed Nurses: Full Deduction Access

Self-employed nurses (nurse practitioners with their own practice, nurse consultants, legal nurse consultants, etc.) can deduct all ordinary and necessary business expenses.

Deductible Expenses

✅ Uniforms and equipment:

Scrubs and lab coats
Stethoscope, BP cuff, otoscope
Medical bag and supplies
Shoes (if required for work only)

✅ Licensing and certification:

State nursing license renewal
National certification (ANCC, AANP)
DEA registration (if prescribing)
Specialty certifications

✅ Continuing education:

Required CE credits
Conferences and seminars
Professional workshops
Medical journals and subscriptions

✅ Professional expenses:

Malpractice insurance
Professional memberships (ANA, specialty organizations)
Background checks

✅ Business expenses:

Home office (if applicable)
Mileage to patients/clients
Business phone and internet
EHR/EMR software subscriptions

Calculation Example: Self-Employed NP

Scrubs and equipment:                    $500
License renewals:                        $300
CE courses and conferences:            $1,500
Malpractice insurance:                 $2,000
Professional memberships:                $400
EHR software:                          $1,200
Mileage (5,000 miles × $0.725):        $3,625
Home office (150 sq ft × $5):            $750

Total deductions:                     $10,275
Tax savings at 24% bracket:            $2,466

Education Credits for All Nurses

Even W-2 nurses can claim education credits for qualifying courses.

Lifetime Learning Credit

Credit amount: 20% of first $10,000 in tuition = up to $2,000
Income limits (2026): Phases out at $80,000-$90,000 (single)
Qualifying expenses: Tuition at eligible institutions (not employer-provided CE)

Example:

BSN to MSN tuition:                    $8,000
Lifetime Learning Credit (20%):        $1,600
Direct tax reduction:                  $1,600

Common Mistakes Nurses Make

Mistake #1: Deducting W-2 Employee Expenses

Problem: Trying to deduct scrubs, licenses, and CE as a W-2 employee

Impact: IRS denies deductions, potential penalties

Solution: W-2 employees cannot deduct these expenses federally (check state rules).

Mistake #2: Travel Nurses Without Valid Tax Home

Problem: Not maintaining a true permanent residence

Impact: All stipends become taxable, plus back taxes and penalties

Solution: Maintain and document your tax home properly.

Mistake #3: Renting Out Your Tax Home

Problem: Renting out your permanent residence while on assignment

Impact: May lose tax home status, making stipends taxable

Solution: Keep your tax home available for your use; paying rent to family is fine.

Mistake #4: Missing Education Credits

Problem: Not claiming Lifetime Learning Credit for nursing courses

Impact: Missing $1,000-$2,000 in tax credits

Solution: Claim education credits on Form 8863 for qualifying tuition.

Track Your Nursing Deductions With AI

Whether you're a travel nurse tracking stipends or a self-employed NP managing expenses, Jupid automates the process.

What makes Jupid different for healthcare workers:

✅ AI accountant in WhatsApp - Ask tax questions anytime, get instant answers backed by IRS guidance

✅ 95.9% accuracy in categorization - Connect your bank; Jupid automatically categorizes scrubs, CE courses, and license fees

✅ Real-time financial insights - See your deductions and estimated tax liability throughout the year

✅ Automatic tax filing - From expense tracking to your tax return, handled for you

Example conversation:

You: "I'm a travel nurse. Are my housing stipends taxable?"
Jupid: "If you maintain a valid tax home (permanent residence you pay for and return to), housing stipends are tax-free under IRS per diem rules. Do you want me to help you verify your tax home status?"

Try Jupid AI Accountant →

Action Checklist by Nurse Type

W-2 Staff Nurses

Check if your state allows unreimbursed employee expenses
Maximize pre-tax benefits (HSA, FSA)
Claim education credits for qualifying tuition
Track expenses in case federal rules change

Travel Nurses

Document your tax home (lease, receipts, utility bills)
Return to your tax home at least once per 12 months
Keep records of duplicate expenses
Track assignment dates and locations
Consult a travel nurse tax specialist

Self-Employed Nurses

Save all receipts for supplies and equipment
Track mileage to patients/clients
Document CE and licensing expenses
Set aside 25-30% of income for taxes
Make quarterly estimated tax payments

Resources and Citations

IRS Publications (Official Sources)

IRS Publication 463 - Travel, Gift, and Car Expenses
IRS Publication 529 - Miscellaneous Deductions
IRS Publication 970 - Tax Benefits for Education
IRS Topic 511 - Business Travel Expenses

Tax Code and Regulations

IRC § 162 - Trade or Business Expenses
IRC § 67 - 2% Floor (suspended for employees)
IRC § 25A - Education Credits
IRS Notice 2026-10 - Standard Mileage Rates for 2026

2026 Key Numbers Summary

Item	2026 Limit
Standard mileage rate	72.5¢ per mile
Simplified home office	$5/sq ft (max $1,500)
Lifetime Learning Credit	Up to $2,000
GSA per diem (M&IE)	$59-$79/day (varies by location)
SE tax rate	15.3%
W-2 employee expenses	NOT deductible federally

Disclaimer

This article provides general information about tax deductions for nurses and should not be considered tax advice. Tax laws change frequently, and individual circumstances vary significantly. Travel nurse tax rules are complex—maintaining a valid tax home is critical and should be verified with a tax professional familiar with travel healthcare. For advice specific to your situation, consult with a qualified tax professional.

Tax Year: 2026 Last Updated: January 24, 2026