If you work at one facility and go home each night, this article is not for you. It is about assignments away from your tax home.
The contract was thirteen weeks. You liked the unit, they liked you, and you extended. Then again. Then again. Nobody sent a letter, nobody changed the pay package, and the stipend kept arriving untaxed.
Somewhere in that sequence the tax treatment changed. Publication 463 says exactly when.
The short answer
| Situation | Temporary? |
|---|---|
| Expected to last a year or less, and does | Yes |
| Expected from the start to run past a year | No — indefinite from day one |
| Expected to be short, extended past a year later | Yes, until your expectation changes |
| Ran fourteen months but you always expected under a year | Fact-dependent — the publication requires it to in fact last a year or less |
The rule, in its own words
"Generally, a temporary assignment in a single location is one that is realistically expected to last (and does in fact last) for 1 year or less. However, if your assignment or job is indefinite, the location of the assignment or job becomes your new tax home and you can't deduct your travel expenses while there."
And the sentence that catches people:
"An assignment or job in a single location is considered indefinite if it is realistically expected to last for more than 1 year, whether or not it actually lasts for more than 1 year."
So the test is not the calendar. It is what you reasonably expected, when you expected it. Leaving at month fourteen does not rescue an assignment you knew in month six would run long.
What changes when it goes indefinite
Everything that made the package worth taking:
"If your assignment is indefinite, you must include in your income any amounts you receive from your employer for living expenses, even if they are called “travel allowances” and you account to your employer for them."
The stipend does not stop arriving. It stops being tax-free. And because the assignment location has become your tax home, travel expenses there are not deductible either — you are no longer away from home in the sense the rules mean.
The date that decides it
Here is the part that is genuinely fair, and that almost nobody explains:
"If employment at a work location initially is realistically expected to last for 1 year or less, but at some later date the employment is realistically expected to last more than 1 year, that employment will be treated as temporary (unless there are facts and circumstances that would indicate otherwise) until your expectation changes. It won't be treated as temporary after the date you determine it will last more than 1 year."
Read that carefully, because it contains both a relief and an obligation.
The relief: the earlier months are not retroactively spoiled. If you genuinely signed for thirteen weeks expecting thirteen weeks, that period was temporary and stays temporary.
The obligation: there is a specific date on which your expectation crossed the line, and after it nothing is temporary. That date is almost always the day you accepted the extension that pushed the total past twelve months — and it is a date only you can know.
The file this needs
One page, kept as you go:
| Date | Facility | Contract period | Cumulative | Expectation at signing |
|---|---|---|---|---|
| 6 Jan | — | 13 weeks | 13 weeks | Thirteen weeks, then move on |
| 2 Apr | — | +13 weeks | 26 weeks | Still expect to leave in summer |
| 1 Jul | — | +13 weeks | 39 weeks | Offered a further extension; undecided |
| 28 Sep | — | +26 weeks | 65 weeks | Accepted — now expect past one year |
The last row is the one that matters. It is the date your expectation changed, written on the day it changed rather than reconstructed in April from a stack of contracts.
Nobody else keeps this. The agency tracks its own eligibility policy, which is a business rule and not the tax rule — and the two are not the same test, however confidently a recruiter describes them.
Three things that do not reset the clock
- Changing units inside the same facility. The test is the work location, not the ward.
- A gap of a few weeks between contracts. There is no stated number of weeks away that restarts anything, and any specific figure you are told is a staffing policy.
- Switching agencies while staying at the same hospital. Your employer changed; the location did not.
What can genuinely change the answer is a real change of work location, judged on the facts. Which is a conversation with a professional who can see your contracts, not a rule you apply from a blog.
What to do with this today
- Find the date your expectation for the current assignment crossed a year, if it has.
- Write down what you expected at each signing, in a sentence, on the day.
- Check whether the stipends were treated as tax-free after that date. If they were and they should not have been, that is a fixable problem and better fixed now.
- Assume nobody else is tracking it. They are not.
The one-year rule is not a trap; it is published, plain, and older than travel nursing. What makes it expensive is that it turns on a date only you were in a position to record.
Track it now. Thank yourself in April.
Common questions
How long can I stay on one assignment before it stops being temporary?
What happens when it becomes indefinite?
Does the clock only matter if I actually stay over a year?
I signed thinking it was thirteen weeks and then kept extending. Am I retroactively wrong?
So what is the date that matters?
What happens to the stipends after that date?
Can I reset the clock by going home for a while?
Does my agency track this for me?
This article is for educational purposes only and does not constitute tax, legal, or financial advice. Consult a qualified tax professional about your situation.