Medical Professionals Get Tax Benefits Under Affordable Care Act

The federal government has been raising taxes in subtle ways. The states have given up on being subtle and are just raising them right and left to cover budget deficits. Nobody seems to be escaping this new tax trend, but that isn't true. Medical professionals can get tax benefits under the new Affordable Care Act if they qualify.

The health care system in this country is a mess to say the least. If you've ever dealt with your health insurance company on a claim, you will agree. Regardless, one of the problems that has arisen is a lack of primary care physicians and staff. Many doctors are training to be specialists, positions that pay far better. This has led to a well documented shortage of primary care physicians.

The problem is particularly bad in rural or underserviced areas. The question is how do you get young doctors to go to these areas when they have other choices? Ah, you use a carrot. Specifically, you provide tax benefits that entice them to make the move for financial reasons.

The new carrot comes as a part of the Affordable Care Act. Under the new law, medical professionals that provide service in "underserved" areas under state programs are going to love tax time. Why? They will be able to get sizable refunds on what they've already paid on 2009 taxes as well as tax cut going forward.

In truth, the program is both good and a perfect example of the maddening nature of the Internal Revenue Code. How so? It has to do with how income is determined. The doctors in the state programs have long received student loan repayment relief for their efforts. Ostensibly, this means part of their loans have been forgiven. Alas, the IRS then considered the forgiven debt to be income for tax purposes. So the young doctors ended up paying taxes on the forgiven student loan debt. Do you have a headache yet?

The Affordable Care Act basically gets rid of this mess. It changes the tax code so that the doctors do not have to pay income tax on the forgiven loan amounts. Hey, that almost makes sense!