Navigating Employment Taxes in Travel Nursing: What You Need to Know

28 Mar Navigating Employment Taxes in Travel Nursing: What You Need to Know

As a travel nurse, you enjoy the flexibility of working in diverse healthcare settings across the country while exploring new places and gaining invaluable experience. However, amidst the excitement of your assignments, it’s crucial to understand the various types of employment taxes that come into play. Here at ATC West Healthcare, we’re dedicated to helping you navigate this aspect of your career seamlessly.

Here are the primary types of employment taxes you should be aware of:

1. Federal Income Tax: Just like any other employee, travel nurses are subject to federal income tax. This tax is calculated based on your total earnings, including your hourly wage, bonuses, and stipends. It’s important to accurately report your income and ensure that the correct amount of federal taxes is withheld from your paychecks.

2. State Income Tax: Depending on the state where you’re working, you may also be subject to state income tax. Each state has its own tax laws and rates, so it’s essential to familiarize yourself with the tax requirements of the states you’ll be working in during your assignments.

3. FICA Taxes: FICA stands for Federal Insurance Contributions Act, and it includes two components: Social Security tax and Medicare tax. These taxes are withheld from your earnings to fund Social Security benefits and Medicare health coverage. As of 2024, the Social Security tax rate is 6.2% on earnings up to a certain limit, while the Medicare tax rate is 1.45% on all earnings. Additional Medicare tax may apply if your income exceeds certain thresholds.

4. State Unemployment Tax: Some states require employers to pay unemployment taxes to fund unemployment benefits for workers who lose their jobs. While travel nurses typically aren’t eligible for these benefits, your employer may still be required to pay state unemployment taxes on your behalf.

5. Local Taxes: In addition to federal and state taxes, you may also be subject to local taxes, depending on the city or county where you’re working. These taxes can vary widely, so it’s essential to research the tax requirements of each location.

6. Travel Nurse-Specific Deductions and Exclusions: Travel nurses often receive tax-free stipends for housing, meals, and incidentals as part of their compensation packages. These stipends are intended to cover the costs associated with temporary lodging and living expenses while on assignment and are typically not subject to federal income tax. However, it’s essential to meet the IRS’s requirements for tax-free reimbursement, such as maintaining a tax home and duplicating expenses.

Understanding and managing your employment taxes is an integral part of being a travel nurse. By staying informed about the tax implications of your assignments and working with reputable agencies like ATC West Healthcare, you can ensure that you’re fulfilling your tax obligations while maximizing your earnings and enjoying a rewarding career in travel nursing.