(Researched and updated February 2026)
Know what to expect when you do your taxes this year.
Picking up per diem nursing jobs is a great way to earn premium pay, but that income is all for nothing if you don’t do your taxes correctly.
If you’re new to working as a freelance PRN nurse, paying taxes will differ from what you are used to. We want our PRN healthcare professionals to be informed and ready to do their taxes right, so we’ve prepared this in-depth guide to the 1099-NEC for nurses and other healthcare workers picking up PRN shifts.
What is a nonemployee compensation form?
Unlike staff employees who typically receive a W-2 at tax time, independent contractors receive the nonemployee compensation form, the 1099-NEC.
The 1099-NEC is sent to both the independent contractor and the IRS and is the official record of contract work payments received throughout the year.
Do PRN nurses file a 1099-NEC?
Yes.
Working PRN shifts through Nursa is different from traditional staff jobs (W-2 employment) because you are considered an independent contractor, a freelancer, or self-employed.
This work classification has different tax implications. Like what?
For starters, you don't have any employer withholdings from the freelance income that you’ve earned.
What are common withholdings on a W-2 employee paycheck?
- State and federal income taxes
- Social Security and Medicare contributions
- Voluntary deductions such as health insurance premiums or retirement contributions
Nursa sends 1099-NECs by January 31 every year to any nursing clinician who earned $600 or more by picking up shifts on the platform.
What types of nurses should file a 1099-NEC?
All independent contractor nurses who have earned $600 or more in a calendar year by picking up PRN shifts on the platform must file 1099-NECs. This includes:
- Registered nurses (RNs)
- Licensed practical/vocational nurses (LPNs/LVNs)
- Certified nursing assistants (CNAs)
- Certified medication aides (CMAs)
- Certified caregivers (CGs)
All 1099-NEC workers must pay self-employment tax if they earned $400 or more in the calendar year.
With $400 as the threshold, you'll likely qualify even if you worked only 1 or 2 shifts the entire year. (Most PRN nurses earn more than $400 in 1 shift, and CNAs can earn more than $400 in only 2 shifts.)
What does the 1099-NEC look like?
You can find the most current version of the 1099-NEC and 1099-NEC instructions on the IRS website, which are continually reviewed and updated.
What is the nonemployee compensation tax rate?
Self-employed workers are responsible for paying their taxes, which include income taxes and the self-employment (SE) tax. The SE tax rate is 15.3% of the income earned. It breaks down like this:
- 12.4% for Social Security
- 2.9% for Medicare
This tax applies to your independent contractor income, even if you have another W-2 job where Medicare and Social Security are withheld (those withholdings only apply to the W-2 employment income).
Why do I have to pay the self-employment tax?
You aren’t being singled out unfairly by the IRS. We all have to pay Social Security and Medicare taxes. The main difference is this:
- W-2 employees have these taxes withheld from their paychecks throughout the year by their employers, so they never even see the money.
- Independent contractors receive the total amount paid, no withholdings, so they see the tax money come and go.
Another difference is that independent contractors do not have an employer contribution to the Social Security and Medicare taxes.
However, the IRS does allow self-employed workers to claim the employer-equivalent portion as a deduction. (We’ll discuss deductions later.)
What are the income taxes?
Staff employees typically have a portion of their paychecks withheld to pay income taxes so that at the time of their annual return, most, all, or even excess taxes have been paid.
Then, when employees file their yearly taxes, they either have to pay additional taxes, break even, or receive a refund.
Independent contractors don’t have this income tax withheld from their paychecks, so they must pay the entire portion of the income tax owed.
Income tax rates will vary based on where you live and work. Not all states have income taxes on wages. Here’s a list of the few that don’t:
Keep in mind that even in these states, you’ll still have to pay the federal income tax, and there may still be local community, county, or city income taxes.
What can you deduct from your 1099 income?
Some states allow nurses to claim work-related expenses like professional licensing fees, continuing education units, equipment, and uniforms under itemized deductions. Make sure you have receipts!
It’s best to discuss with a professional who specializes in taxes for healthcare workers whether to take the standard or itemized deductions.
There are also at least 2 above-the-line deductions (meaning you can claim them whether you opt for itemized or standard) that 1099 nurses can currently claim:
- Health insurance deduction: Per the IRS, “Under Section 2042 of the Small Business Jobs Act, a deduction, for income tax purposes, is allowed to self-employed individuals for the cost of health insurance. This deduction is taken into account when calculating net earnings from self-employment.
- Employer-equivalent of SE tax: Per the IRS, “You can deduct the employer-equivalent portion of your self-employment tax in figuring your adjusted gross income. This deduction only affects your income tax. It does not affect either your net earnings from self-employment or your self-employment tax.”
When to file the 1099-NEC
Because nothing is withheld from your paychecks, paying a lump sum all at once can be a challenge for many freelancers.
To offset this, contractors often pay “estimated taxes” quarterly to break the payments into smaller, more manageable amounts.
Do I have to pay estimated taxes quarterly?
The IRS stipulates that you must pay estimated quarterly payments if your expected tax payment amount reaches or surpasses $1,000.
How do you figure that out?
The IRS has created an interactive quiz to help you with this.
You’ll need your federal tax return from the previous year and the Form 1040-ES handy. The quiz can be found here.
I should have paid quarterly taxes last year: What do I do?
If you determine that you should have paid quarterly taxes but didn’t, you may be subject to a penalty.
The IRS calculates penalties with a formula that includes the number of days between the missed due date and the late payment date. Furthermore, the IRS explicitly states that it charges interest on penalties.
But, there’s hope!
You might qualify to remove, reduce, or dispute the penalty. Also, if the amount you owe will cause you financial difficulty, you may be able to ask for a payment plan to settle your tax obligations.
Talk to your tax professional to discuss your options.
When are estimated taxes due?
If you’ve determined that you should start paying estimated taxes quarterly, this is for you.
The exact dates vary slightly each year, but are typically within the first half of the month.
- First-quarter taxes are due in April (income earned January 1 to March 31)
- Second-quarter taxes are due in June (income earned April 1 to May 31)
- Third-quarter taxes are due in September (income earned June 1 to August 31)
- Fourth-quarter taxes are due in the following January (income earned September 1 to December 31)
Set yourself calendar reminders.
Can I do my own taxes as a contractor?
Everyone can do their own taxes.
However, we strongly recommend hiring a tax professional.
You might feel the urge to save the money you would spend on hiring someone; however, taxes are complicated, and laws change. Doing it yourself could cause you to miss out on a tax credit or deduction that would have been to your benefit.
Next steps as a 1099 nurse contractor
Navigating taxes as a per diem nurse requires planning and keeping yourself informed. Save your receipts, set reminders for estimated tax deadlines on your calendar, and stay organized.
The premium pay associated with 1099 contracting can help you support yourself while in school, reach your financial goals, or simply take control of your work schedule.
Ready to take the next step?
Download Nursa and pick up high-paying PRN nursing shifts at healthcare facilities near you.
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