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Excludes from gross income any amount received from a State loan repayment or loan forgiveness program intended to increase the availability of health care services in underserved or health professional shortage areas. Applies to amounts received in taxable years beginning after December 31, 2008.
HHS notes the provision in a June 16, 2010 fact sheet about efforts to support the primary care workforce. The IRS also posted information about the ACA’s expansion of the tax exclusion on its website.
On Feb. 25, in a related development, HRSA posted a grant opportunity under which states and territories are eligible for $10M in grants for administering State Loan Repayment Programs that support primary care practitioners in Health Professional Shortage Areas. The application deadline is April 29, 2014.
SEC. 10908. EXCLUSION FOR ASSISTANCE PROVIDED TO PARTICIPANTS IN STATE STUDENT LOAN REPAYMENT PROGRAMS FOR CERTAIN HEALTH PROFESSIONALS. (a) IN GENERAL.—Paragraph (4) of section 108(f) of the Internal Revenue Code of 1986 is amended to read as follows: ‘‘(4) PAYMENTS UNDER NATIONAL HEALTH SERVICE CORPS LOAN REPAYMENT PROGRAM AND CERTAIN STATE LOAN REPAYMENT PROGRAMS.—In the case of an individual, gross income shall not include any amount received under section 338B(g) of the Public Health Service Act, under a State program described in section 338I of such Act, or under any other State loan repayment or loan forgiveness program that is intended to provide for the increased availability of health care services in underserved or health professional shortage areas (as determined by such State).’’. (b) EFFECTIVE DATE.—The amendment made by this section shall apply to amounts received by an individual in taxable years beginning after December 31, 2008.
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