Qualifications for rural physician tax credit would change with new Alabama bill

MONTGOMERY, Ala. (WIAT) — A bill introduced in Alabama would allow for more rural physicians to qualify for an income tax credit.

Under existing law, rural physicians only qualify for an income tax credit if they meet certain requirements. Specifically, a physician must have admission privileges to a small or rural hospital, and they must practice and reside in a community that has a hospital with an emergency room and a population of less than 25,000 residents.

HB239 would omit the requirement that a physician must reside in a community that has a hospital with an emergency room in order to qualify for the income tax credit.

Existing law, as well as the proposed bill, define a rural physician as “a physician licensed to practice medicine in Alabama who practices and resides in a small or rural community and has admission privileges to a small or rural hospital.”

Both define a “small or rural hospital” as being an acute care hospital that meets one of these requirements: it must contain less than 105 beds and be located more than 20 miles away from another acute care hospital in the state, or it must receive Medicare rural reimbursement from the federal government.

Previously, Alabama law defined a “small or rural community” as “a community in Alabama that has less than 25,000 residents according to the latest decennial census and has a hospital with an emergency room.”

This bill would define the term as “a community in Alabama that has less than 25,000 residents according to the latest decennial Census,” omitting the requirement for a hospital with an emergency room.

If passed, the bill would immediately go into effect.