The Rule
If you work in the same general area for more than 12 months (or reasonably expect to), the IRS considers that location your tax home. Once it’s your tax home, you can no longer receive tax-free housing and meal stipends for working there.Key Details
Cumulative, Not Continuous
The 12-month clock counts total time in a location, not just a single continuous stint. If you work 6 months in Dallas, leave for 3 months, then return for 7 months, you’ve spent 13 months in Dallas — exceeding the limit.Location-Based, Not Facility-Based
The IRS looks at the general area, not the specific hospital. Working at three different facilities in the Houston metro area all counts toward the same 12-month clock.Rolling 24-Month Window
TaxHomeBase tracks location durations using a rolling 24-month window to capture cumulative time across assignments.The “Expectation” Trap
The rule triggers not just when you actually exceed 12 months, but when you reasonably expect to. If you sign a 13-month contract, the rule may apply from day one — not just at the 12-month mark.What Happens When You Exceed It
- Stipends for that location become taxable
- The location may be considered your new tax home
- If you have two tax homes (old permanent + new work location), the IRS uses a “facts and circumstances” test to determine which is primary
- You may still receive tax-free stipends for other locations that haven’t exceeded 12 months
How TaxHomeBase Tracks This
Assignment-Level Badges
Each assignment card shows duration badges:- Amber “Approaching 12-month limit” — Assignment exceeds 45 weeks
- Red “Exceeds 12-month limit” — Assignment exceeds 52 weeks
Location Duration Tracker
The Assignments page includes a Location Duration Tracker that shows cumulative days per location across all assignments in a rolling 24-month window:| Status | Days | What It Means |
|---|---|---|
| Safe | < 270 days | Well within the limit |
| Approaching limit | 270–365 days | Consider the 12-month rule implications |
| Exceeds limit | > 365 days | Location may be your new tax home |
Alerts
The notification system includes along_assignment alert that triggers at 45 weeks for any single assignment.
Considerations
Travel nurses approaching the 12-month threshold often weigh these factors with their tax advisor:- Location rotation — Returning to the same metro area within 12 months adds to the cumulative clock
- Cumulative tracking — The IRS looks at total time per location, not just individual contract lengths
- Extension risk — Extending a contract near the 12-month mark may trigger the rule
- Break documentation — Records of where you worked during gaps between stints in the same area can support your position