HR3145-119

What This Bill Does

The Nurse Corps Tax Parity Act amends Internal Revenue Code sections 108(f) and 117(c). It adds Public Health Service Act section 846 Nurse Corps payments to the loan-forgiveness and scholarship tax rules that already cover certain National Health Service Corps payments. The change applies to amounts received in taxable years beginning after enactment. The practical effect is to prevent Nurse Corps loan repayment or scholarship support from becoming taxable income simply because the recipient is in the Nurse Corps pathway rather than the parallel health-service pathway.

Who Benefits and How

Nurse Corps scholarship recipients benefit because covered payments receive tax treatment comparable to other health-service scholarship support. Nurse Corps loan repayment participants benefit if forgiven or repaid debt is excluded from taxable income. Nurses serving shortage areas benefit from a stronger after-tax value for federal workforce incentives. Health care facilities in underserved communities benefit indirectly if Nurse Corps incentives recruit and retain more nurses.

Who Bears the Burden and How

IRS guidance staff must update tax instructions and implementation for Nurse Corps payments. Treasury revenue accounts lose tax collections that would otherwise apply to covered Nurse Corps amounts. HRSA Nurse Corps administrators must coordinate program tax information for participants. Tax preparers must account for the new exclusion when advising Nurse Corps participants.

Key Provisions

• Amends section 108(f) to include Nurse Corps section 846 payments in loan-forgiveness tax treatment.
• Amends section 117(c) scholarship rules to include the Nurse Corps scholarship program.
• Applies to amounts received in taxable years beginning after enactment.
• Provides tax parity between Nurse Corps payments and comparable health-service workforce incentives.