Massachusetts Legislature Proposes Healthcare Preceptor Tax Credit

Massachusetts lawmakers have introduced new legislation that could significantly impact healthcare providers, tax professionals, and workforce planning across the state. House Bill H.3218 and Senate Bill S.1960 propose creating a Massachusetts healthcare preceptor tax credit designed to incentivize licensed clinicians to supervise students in clinical training programs.

At a time when healthcare workforce shortages remain a persistent issue, this proposed state income tax credit aims to remove one of the biggest bottlenecks in medical education: limited access to qualified clinical preceptors. For CPAs, tax attorneys, and healthcare practice advisors, this bill is more than a workforce initiative. It represents a potential new tax planning opportunity for eligible clients beginning in tax year 2026.

Key Takeaways

• Massachusetts has introduced legislation to create a state income tax credit for healthcare preceptors.

• Eligible clinicians could receive $1,000 per qualifying rotation, up to $5,000 per year.

• Physicians, nurses, advanced practice nurses, and physician assistants may qualify.

• Preceptorships must occur in designated healthcare workforce shortage areas.

• If enacted, the credit would apply to tax years beginning January 1, 2026.

What the Proposed Massachusetts Preceptor Tax Credit Would Do

The legislation would allow certain licensed healthcare providers to claim a state income tax credit for serving as unpaid preceptors in approved clinical training programs.

Under the proposal, eligible providers could claim:

• $1,000 per completed qualifying rotation

• A maximum of $5,000 per taxable year

To qualify, preceptors must complete at least three clinical rotations of at least 100 hours each in areas designated as workforce shortage areas by the Massachusetts Department of Public Health.

The credit would be available beginning with the 2026 tax year if the legislation is enacted. The Department of Public Health would certify eligible rotations, and practitioners would use that certification to claim the credit on their Massachusetts income tax return.

Why Massachusetts Is Introducing This Tax Credit

Healthcare workforce shortages remain a structural issue across Massachusetts, particularly in rural and underserved communities. Clinical training capacity often limits how many students medical, nursing, and physician assistant programs can admit.

Preceptors play a central role in clinical education. They supervise students in real-world care environments and ensure competency standards are met. However, many clinicians receive little or no compensation for taking on this responsibility. As a result, some providers decline to participate in training programs.

By introducing a targeted tax credit, Massachusetts is attempting to:

• Increase the number of licensed providers willing to serve as preceptors

• Expand clinical training capacity

• Strengthen long term workforce pipelines

• Support healthcare delivery in shortage areas

Other states, including Georgia and Colorado, have implemented similar preceptor tax incentive programs with measurable success in increasing participation.

Who Would Be Eligible

If enacted, the tax credit would apply to:

• Licensed physicians

• Registered nurses

• Advanced practice registered nurses

• Licensed physician assistants

Eligibility would require:

• Participation in an approved preceptorship program

• Completion of required clinical hours

• Service in a designated shortage area

• Certification by the Massachusetts Department of Public Health

For tax professionals, this means documentation and compliance will be critical. Advising healthcare clients early on recordkeeping and eligibility standards will help ensure the credit can be successfully claimed.

Planning Considerations for CPAs and Tax Advisors

For firms serving healthcare clients in Massachusetts, this proposal presents several practical considerations:

1. Client identification: Determine which healthcare providers currently serve as preceptors or may consider doing so.

2. Documentation systems: Help clients track hours, rotations, and shortage area designations.

3. Interaction with other tax benefits: Evaluate whether the credit affects overall state tax liability, estimated payments, or planning strategies.

4. Legislative monitoring: Track amendments or changes as the bill moves through committee review and floor votes.

State tax credits often become effective quickly once passed. Being proactive allows firms to position clients to benefit immediately.

This is where tools like Bizora can quietly add value. Having real time alerts on state tax law developments allows advisors to identify planning opportunities before competitors do, especially when niche credits like this emerge at the state level.

What This Means for the Future of Healthcare Tax Planning in Massachusetts

The proposed Massachusetts healthcare preceptor tax credit reflects a broader trend of states using targeted income tax incentives to address workforce challenges. Rather than broad tax rate reductions, states are increasingly designing credits tied to economic development, workforce training, and industry support.

If enacted, this credit could:

• Improve access to clinical training slots

• Increase provider participation in underserved communities

• Create measurable state tax savings opportunities for eligible clinicians

For tax professionals, the opportunity lies not only in claiming the credit but also in strategic planning around it. Credits tied to professional activity require careful compliance management and proactive communication with clients.

Staying ahead of state legislative changes is no longer optional for advisors working in specialized industries. It is part of delivering forward looking tax guidance.

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Frequently Asked Questions

What is a healthcare preceptor tax credit?

It is a proposed Massachusetts state income tax credit that would reward licensed healthcare providers who supervise students in approved clinical training programs in designated shortage areas.

When would the credit take effect?

If passed, the credit would apply to tax years beginning January 1, 2026.

How much is the proposed credit worth?

Eligible preceptors could claim $1,000 per qualifying rotation, up to a maximum of $5,000 per year.

Who determines shortage areas?

The Massachusetts Department of Public Health would designate eligible workforce shortage areas.

Is the credit refundable?

The current proposal does not indicate that the credit is refundable. It would reduce state income tax liability up to the allowable amount.