Your Paycheck’s Fine. Your Taxes? Maybe Not. (Pt.1)

If you're new to this career path and wondering what travel nurses do, the short answer is: they take temporary assignments at hospitals and facilities across the country. That flexibility comes with unique tax challenges, especially if you're crossing state lines several times a year.

Filing taxes as a healthcare traveler can get complicated fast. Different states, different rules, and a whole lot of gray areas. That’s why FlexCare is bringing you this three-part series focused entirely on taxation for traveling clinicians. Over the next two articles, we’ll dig deeper into stipends, tax home rules, and how to dial in your withholdings to avoid surprises. The full series will culminate in a downloadable tax guide with a section answering all your questions, provided by TravelTax. Designed specifically for travel nurses and allied health professionals.

This first article covers the essentials of multi-state filing, what matters most, what to watch for, and how to stay compliant when you're working assignments across state lines.

All references and data are current as of September 2025. *

*Where 2025-specific IRS publications are not yet available, the most recent publicly issued guidance (usually 2024 or early 2025) has been used and noted.

• Federal and state income taxes are typically due in mid-April each year. The IRS may offer extensions to file, but your payments are still due by the tax deadline to avoid penalties.
• Filing deadlines may vary slightly depending on weekends, holidays, or extensions announced by the IRS.
• Whether you itemize or take the standard deduction depends on your personal financial picture. For reference, the standard deduction has historically increased slightly each year due to inflation. *Exact figures for 2025 returns are typically published by the IRS in late Q4
• Mileage deductions, medical expenses, and housing stipends may be impacted by changes in federal rates or state-specific rules. For example, in 2025, the IRS business mileage rate is 67 cents per mile. Track updates from the IRS and your tax advisor.
• To avoid underpayment penalties, make sure you're having enough withheld or are making quarterly estimated payments based on your total expected income.

Do Travel Nurses and Clinicians Have to File Taxes in Multiple States​​​​​​?
Usually yes. If you worked in several states, you generally file a nonresident return for each work state to report the wages earned there. Then you file your resident return at home. Your home state computes tax on all your income and typically gives a credit for taxes paid to the other state, so the same dollars are not taxed twice.

What about reciprocity states?
Some neighboring states have wage-tax agreements, so you pay only your home state on those wages. Example: Ohio has reciprocity with Indiana, Kentucky, Michigan, Pennsylvania, and West Virginia. If you live in one of those states and work in Ohio, wages are usually taxed only by your home state, typically by filing the employer exemption form.

What Are Reverse-Credit States for Multi-State Tax Filing?
A handful of states handle credits differently in certain cross-border situations. Instead of your home state giving the credit, the non-resident work state may allow the credit for the tax you owe at home. If you’re a resident of Virginia, California, Oregon, Arizona, or Indiana and you also worked in another state, read your state’s credit instructions closely and follow the forms they specify.

• Virginia: Schedule OSC and documentation of the other state return.
• California: Other State Tax Credit via Schedule S. You do not take California’s credit if the other state already gave you one.
• Oregon: See personal credits guidance for “credit for taxes paid to another state.”
• Arizona: Credit for Taxes Paid to Another State or Country, Form 309 and instructions.
• Indiana: Credit for taxes paid to other states. See Information Bulletin 28.

How to avoid underpayment penalties as a traveler
If your home-state rate is higher than your assignment state, you may owe a top-up when you file. Two simple ways to stay ahead:

1. Increase home-state withholding with your employer so more tax goes to the right place during the year.
2. Make quarterly estimated payments and aim to meet IRS safe harbor thresholds: typically, 90% of your current-year tax or 100% of your previous year's liability (110% if your AGI was over $150,000).*

Why your paycheck can look “over-withheld” during surge weeks
Withholding treats each paycheck as if the same rate will continue all year. Over time, crisis rates or stacked shifts can spike withholding for that period. You can either let it settle and reconcile at filing or adjust your W-4 to better match your expected annual income.

Filing sequence
A clean order prevents credit problems. File nonresident returns for each work state first. Then file your home state using the exact numbers from those returns so credits flow correctly.

• Assignment dates by state
• Documentation of your housing for travel nurses, setup, or permanent residence
• W-2s and paystubs that show state wages and withholding per state
• Housing receipts and mileage logs if your tax professional needs to evaluate any deductions or reimbursements
• Any reciprocity exemption forms you gave to payroll when you worked in a reciprocity state

Know another traveler who needs this? Share it and help them dodge tax trouble too.

TravelTax perspective

Our friends at TravelTax specialize in traveler rules. Their FAQs cover multi-state filing, reciprocity, and paycheck quirks in depth.

Need help understanding how your travel nurse rental or housing situation affects your taxes?

Stay tuned for Article 2 in this series, where we dig deeper into stipends, documentation, and how your living arrangements impact your tax home status.

Next up: stipends, tax home, and per diem rules. Don’t miss it  - subscribe or follow FlexCare on LinkedIn for the latest

What makes a stipend non-taxable? What exactly is a tax home, and how do you know if you have one? Article 2 of our tax series will break down these key concepts so you can better understand what counts as income, what doesn't, and how to stay compliant while maximizing your benefits. Watch for it soon in the FlexCare Resource Center.

Important note

FlexCare is not acting as your tax professional. State rules change, and your situation is unique. Confirm with a qualified tax professional and the applicable state tax agency before filing.