If the travel nurse fails to meet the first rule, all travel benefits must be treated as taxable compensation from the beginning of the assignment. The taxable compensation would include all meal per diems, housing allowances or company paid housing costs, and mileage reimbursements. This compensation would be subject to applicable payroll tax withholding. If the travel nurse maintains a permanent tax home and the assignment is within commuting distance of that tax home, no travel benefits will be paid because it is not reasonable to believe those costs will be incurred. If the one-year limit rule is failed, all of the travel benefits must be treated as taxable compensation as soon as it becomes known that the one-year limit will be exceeded. Generally, it is considered known at the time of the signing of the assignment extension that will make the total length of the assignment (plus extensions) beyond one year. The taxable benefit treatment goes into effect on such signing date and would continue through the remainder of the extended assignment.