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LB 305

Adopt the Preceptorship Tax Credit Act

109th Legislature (2025-2026) Introduced by Teresa Ibach

The bill creates a $1,000 nonrefundable tax credit (up to $5,000 per physician annually) for licensed physicians who uncompensatedly precept medical students, prioritizing rural lo

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Bill Summary · LB 305

Summary of Nebraska LB 305 — Adopt the Preceptorship Tax Credit Act

Overview

LB 305, introduced by Senator Teresa Ibach and referenced as the Preceptorship Tax Credit Act, seeks to establish a new nonrefundable state income tax credit for licensed physicians who serve as uncompensated preceptors in medical student preceptorships. The bill was introduced January 15, 2025, referred to the Revenue Committee, heard on January 30, 2025, and placed on General File on March 11, 2025.

Purpose and Intent

  • Create a targeted tax incentive to encourage licensed physicians to provide clinical training or on-the-job training to medical students participating in Nebraska-based preceptorships.
  • Prioritize rural care by giving preference to physicians serving in counties with populations under 100,000.

Key Provisions

  • Name: The act shall be known and cited as the Preceptorship Tax Credit Act.
  • Tax Credit: A nonrefundable credit of $1,000 for each 80-hour clinical rotation completed by a licensed physician serving as an uncompensated preceptor.
  • Annual Cap per Physician: The credit cannot exceed $5,000 per tax year for any single licensed physician.
  • Fiscal Year Cap: The Department of Revenue may approve up to $1,000,000 in total credits per fiscal year.
  • Eligibility Window: Applies to tax years beginning on or after January 1, 2026.
  • Application Process: Physicians must apply with an affidavit verifying uncompensated service and other required documentation. The Department certifies approved credits to qualifying physicians.
  • Rural Priority: Credits are prioritized for physicians who precept in rural locations; if the annual limit is reached on the day applications exceed the cap, approvals are prorated among those applications received on that day.
  • Nontransferability: Credits are not transferable, sold, or assigned.
  • Administration: The Department of Revenue is authorized to adopt rules and regulations to implement the act.
  • Harmonization: The act amends existing statute (77-2715.07) to include the new credit among nonrefundable credits and repeals the prior language as part of the act.
  • Repealer: The act includes a repealer provision consistent with enacting the new credit.

Definitions (Section 2)

  • Department: Nebraska Department of Revenue.
  • Licensed physician: Individual licensed to practice medicine under Nebraska’s Medicine and Surgery Practice Act.
  • Preceptorship program: An organized system pairing an enrolled Nebraska medical school student with a physician preceptor to achieve specified learning objectives.
  • Rural location/population threshold: Location in a county with fewer than 100,000 residents.

Who Would Be Affected

  • Licensed physicians who participate as uncompensated preceptors in Nebraska medical school preceptorships.
  • Medical students and accredited medical schools in Nebraska (indirectly, through expanded training opportunities).
  • The Nebraska Department of Revenue, which would administer and oversee credits and forms.

Procedural and Timeline Aspects

  • Introduced: January 15, 2025
  • Hearing: January 30, 2025 (Revenue Committee)
  • Committee Action: Advanced to General File (March 11, 2025)
  • Effective for tax years: Beginning January 1, 2026
  • Regulatory Authority: Department of Revenue to adopt rules and forms

Sponsors

  • Primary: Senator Teresa Ibach
  • Committee: Revenue
  • Chair: Senator R. Brad von Gillern

This bill creates a targeted, fiscally capped tax incentive to bolster clinical training opportunities in Nebraska, with a clear emphasis on rural placement and uncompensated preceptorships.

Compiled from official sources — confirm details with the bill’s official record.

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