Oregon Rural Practitioner Tax Credit for NPs & PAs
The definitions below reference maximum credit tiers (represented as a spreadsheet Excel | PDF, and as a map). Bolded lines are new rules beginning with tax year 2018.
- Must be licensed by the State of Oregon.
- NPs & PAs whose practice is rural.
- 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.
- Eligible NPs 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 (measured in a straight line, not road miles):
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
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.
Please complete a form for the tax year you want to claim.
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 2019 (currently the oldest amendable year) is amendable until the tax filing deadline in 2023.
The credit is prorated on a month-by-month basis. Each eligible month is worth 8.33% of the overall credit.
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.
The program's current sunset date is December 31, 2027. Should the program be discontinued at that time, a taxpayer who meets the eligibility requirements for tax year 2027, could be allowed the credit through tax year 2036, as long as they maintain all eligibility requirements.
These forms are electronic. If possible, please fill out as much as possible on the computer and take a screenshot if you would like to retain a copy of your application.
You can expect to receive confirmation of your eligibility within six weeks of receipt at ORH (but probably sooner) during the months of January, February, and March and within three weeks the rest of the year.
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.
Workforce Services | Joie Lawson 503-418-3023 | toll-free 866-674-4376