Accounting and Tax Services
Dec 01

Health Professionals’ Student Loan Repayments

Effective for amounts received after 1/1/09, IRC Sec. 108(f)(4) authorizes an income exclusion for amounts received under a state loan repayment program or loan forgiveness program that is intended to increase the availability of health care services in areas that a state determines are underserved or have a shortage of health professionals. In this legal memo, the IRS determined that loan repayments received by participants in a state program designed to encourage healthcare professionals to perform services in underserved areas are excludable from income under this provision. The repayments are not wages, are not subject to income tax withholding or employment taxes, and are not subject to Form W-2 or Form 1099.

About Reed Tinsley, CPA

As a top advisor to physicians, I help increase practice profits by delivering hands-on, expert medical accounting/tax support, practice counsel, and revenue-building strategies. Read more →