Oregon Office of Rural Health

Oregon Rural Practitioner Tax Credit for MDs and DOs

McDonald Crossing

Temporary Waiver for the Oregon Rural Practitioner Tax Credit

The Oregon Office of Rural Health is issuing a temporary waiver for otherwise eligible practitioners who become active staff or on contract to provide services with an ineligible hospital because of Covid 19. This waiver will be in effect as long as the Governor of Oregon’s emergency declaration is in effect.

This waiver covers those practitioners whose practices outside of the hospital are deemed eligible. This waiver does not include practitioners who are already on active staff or contract with an ineligible hospital.

This waiver does not override other eligibility criteria.

If you have questions about your practice and how this waiver applies, please contact Eric Jordan | jordane@ohsu.edu

Eligibility Criteria

The definitions below reference eligible hospitals and maximum credit tiers (represented as a spreadsheet Excel | PDF, and as a map).

  • Must be licensed by the State of Oregon.
     
  • If an MD or DO is on active staff with a hospital, it must be one of the eligible hospitals for this program. Those eligible hospitals are either state Type A, B, exceptional C, or federal Critical Access Hospital (CAH).

    If a hospital is a Type B, it cannot be located in a Metropolitan Statistical Area (MSA). Oregon’s MSAs include Multnomah, Clackamas, Washington, Polk, Yamhill, Marion, Lane, Deschutes, Columbia, Benton, Linn, Josephine, and Jackson counties. There is an inclusion allowance for Type B hospitals in an MSA, which are also 30 or more miles from the major population center in the MSA, or if a Type B is in a county of fewer than 75,000 population. Currently PeaceHealth Peace Harbor in Florence is the only Type B that meets this criteria.

  • MDs or DOs who are not on the medical staff of any Oregon hospital, but whose practice is rural.
  • MDs or DOs on the staff of an ineligible hospital, but whose practices are located outside the immediate service area of the community where the hospital is situated, whose practice locations are deemed rural by the Oregon ORH.
  • MDs or DOs on staff at a rural hospital that was designated a rural referral center by the federal government before January 1, 1989, and that serves a community with a population of at least 14,000 but not more than 19,000. This applies only to Bay Area Hospital in Coos Bay and became effective on January 1, 2014. It does not apply to previous amendable tax years.
  • Must provide a minimum of 20 hours per week of patient care, averaged over the month in an eligible rural area.
  • MDs and DOS must attest to being willing throughout the tax year to serve patients with Medicare and Medicaid coverage. The practitioner must accept patients insured by Medicare and Medicaid until his/her patient panel reaches a threshold of 20 percent Medicare and 15 percent Medicaid, or the same percentage as in the county population if that percentage is less.
  • There are now tiers that dictate the maximum possible tax credit amount.  Those tiers are as follows based upon the location of your practice site:

    If an eligible practitioner meets the criteria of more than one tier, the maximum possible credit would be that of the higher tier.

    • Tier 1: 10-20 miles from the centroid of a community with a population of 40,000 or more = $3,000
    • Tier 2: 20-50 miles from the centroid of a community with a population of 40,000 or more = $4,000
    • Tier 3: 50+ miles from the centroid of a community with a population of 40,000 or more = $5,000

The definitions below reference eligible hospitals and maximum credit tiers (represented as a spreadsheet Excel | PDF, and as a map). Bolded lines are new rules beginning tax year 2018.

  • Must be licensed by the State of Oregon.
     
  • If an MD or DO is on active staff with a hospital, it must be one of the eligible hospitals for this program. Those eligible hospitals are either state Type A, B, exceptional C, or federal Critical Access Hospital (CAH).

    If a hospital is a Type B, it cannot be located in a Metropolitan Statistical Area (MSA). Oregon’s MSAs include Multnomah, Clackamas, Washington, Polk, Yamhill, Marion, Lane, Deschutes, Columbia, Benton, Linn, Josephine, and Jackson counties. There is an inclusion allowance for Type B hospitals in an MSA, which are also 30 or more miles from the major population center in the MSA, or if a Type B is in a county of fewer than 75,000 population. Currently PeaceHealth Peace Harbor in Florence is the only Type B that meets this criteria.

  • MDs or DOS who are not on the medical staff of any Oregon hospital, but whose practice is rural.
  • MDs or DOs on the staff of an ineligible hospital, but whose practices are located outside the immediate service area of the community where the hospital is situated, whose practice locations are deemed rural by the Oregon ORH.
  • MDs or DOS on staff at a rural hospital that was designated a rural referral center by the federal government before January 1, 1989, and that serves a community with a population of at least 14,000 but not more than 19,000. This applies only to Bay Area Hospital in Coos Bay and became effective on January 1, 2014. It does not apply to previous amendable tax years.
  • Must provide a minimum of 20 hours per week of patient care, averaged over the month in an eligible rural area.
  • Has an individual adjusted gross income not in excess of $300,000 for the tax year. The limitation in this paragraph does not apply to a physician who practices as a general surgeon, specializes in obstetrics or specializes in family or general practice and provides obstetrical services.
  • Eligible MDs and DOs must attest to being willing throughout the tax year to serve patients with Medicare or Medicaid coverage. The practitioner must accept patients insured by Medicare or Medicaid until his/her patient panel reaches a threshold of 20 percent Medicare and 15 percent Medicaid, or the same percentage as in the county population if that percentage is less.
  • There are now tiers that dictate the maximum possible tax credit amount. Those tiers are as follows based upon the location of your practice site:

    If an eligible practitioner meets the criteria of more than one tier, the maximum possible credit would be that of the higher tier.

    • Tier 1: 10-20 miles from the centroid of a community with a population of 40,000 or more = $3,000
    • Tier 2: 20-50 miles from the centroid of a community with a population of 40,000 or more = $4,000
    • Tier 3: 50+ miles from the centroid of a community with a population of 40,000 or more = $5,000

The definitions below reference eligible hospitals and maximum credit tiers (represented as a spreadsheet (Excel | PDF), and as a map). Bolded lines are new rules beginning tax year 2020.

  • Must be licensed by the State of Oregon.
     
  • If an MD or DO is actively practicing in and a member of the medical staff staff with a hospital, it must be one of the eligible hospitals for this program. Those eligible hospitals are:
  • MDs or DOS who are not on the medical staff of any Oregon hospital, but whose practice is rural.
  • MDs or DOs on the staff of an ineligible hospital, but whose practices are located outside the immediate service area of the community where the hospital is situated, whose practice locations are deemed rural by the Oregon ORH.
  • Must provide a minimum of 20 hours per week of patient care, averaged over the month in an eligible rural area.
  • Has an individual adjusted gross income not in excess of $300,000 for the tax year. The limitation in this paragraph does not apply to a physician who practices as a general surgeon, specializes in obstetrics or specializes in family or general practice and provides obstetrical services.
  • Eligible MDs and DOs must attest to being willing throughout the tax year to serve patients with Medicare or Medicaid coverage. The practitioner must accept patients insured by Medicare or Medicaid until his/her patient panel reaches a threshold of 20 percent Medicare and 15 percent Medicaid, or the same percentage as in the county population if that percentage is less.
  • There are tiers that dictate the maximum possible tax credit amount. Those tiers are as follows based upon the location of your practice site:

    If an eligible practitioner meets the criteria of more than one tier, the maximum possible credit would be that of the higher tier.

    • Tier 1: 10-20 miles from the centroid of a community with a population of 40,000 or more = $3,000 
    • Tier 2: 20-50 miles from the centroid of a community with a population of 40,000 or more = $4,000 
    • Tier 3: 50+ miles from the centroid of a community with a population of 40,000 or more = $5,000

New Participants

If you meet the eligibility criteria listed above and have never applied for this credit, please complete an application for the tax year you want to claim. If there were previous years you want to claim, use the renewal form for those tax years.

Once your initial application has been received and your practice is determined eligible, every January you will automatically be sent an email letting you know the next year's renewal form is live. If you claim the credit on your tax return without submitting an application or renewal, the Oregon Department of Revenue will deny the credit.

There is an annual processing fee ($45 – made payable to the Oregon Office of Rural Health), which must accompany all forms. At this point in time, it must be in the form of a check or money order.

Existing Participants

Please complete a renewal form for the tax year you want to claim.

10-Year Limit

Beginning with tax year 2018, eligible practitioners can claim only 10 eligible tax years.

Amending Previous Years

This credit is amendable for 3 previous tax years.

Example: tax year 2017 (currently the oldest amendable year) is amendable until the tax filing deadline in 2021.

Prorated

The credit is prorated on a month-by-month basis. Each eligible month is worth 8.33% of the overall credit.

Eligible Hours

The only time allowed for the credit is direct patient care (this includes charting for those patients). Not allowed are on-call hours, education, travel, vacation, holidays, leave of any sort, or administrative time.

Hours are to be reported as averaged work weeks for each month. If you do not know what your average work week is, divide your monthly total direct patient care hours by 4.

Do not report monthly totals (i.e.: 160), ranges (i.e.: 8-16), or approximations (i.e.: 24+, or ~20). Report only the exact averaged work week of direct patient care as it was for each month within the tax year.

Locum Tenens, Home Health, and Telemedicine

Locum tenens, home health, and telemedicine are all eligible, but as with all claims for this credit, each participant is required to report average work week hours for each eligible practice site. Hours and sites cannot be combined.

If providing home health, the patient’s street address must state patient home, with the rest of the data completed. If there are multiple patient homes in the same city within a month, this is the only case where sites can be combined for a month’s hours.

Program Sunset

The program's current sunset date is December 31, 2021. Should the program be discontinued at that time, a taxpayer who meets the eligibility requirements for tax year 2021, could be allowed the credit through tax year 2030, as long as they maintain all eligibility requirements.

ORH

You can expect to receive confirmation of your eligibility within six weeks (but probably sooner) during the months of January, February, and March and within two weeks the rest of the year.

Please note: this is handled by mail, and USPS is the only carrier who can deliver to our closed building.

Oregon DOR

The Oregon Department of Revenue (DOR) can take up to 48 hours to confirm data from ORH. If you file prior to the date specified on your ORH confirmation, you could run the risk of the DOR software automatically denying your claim for the credit because the DOR system might not yet have recorded the ORH submission.

Please wait for 48 hours to pass after confirmation before claiming the credit on your state taxes, or if you are applying or renewing prior to the end of January in any tax year, please wait until the end of January to ensure the DOR is accepting new tax year data.

Contact

Eric Jordan | jordane@ohsu.edu | 503-494-4451 | toll-free 866-674-4376