Merkley, Murray, Wicker, and Boozman Introduce Legislation to Lower Tax Burden for Public Service Nurses

Washington, D.C. – Today, Oregon’s U.S. Senator Jeff Merkley, along with Senator Patty Murray (D-WA), Senator Roger Wicker (R-MS), and John Boozman (R-AR), introduced the Nurse Corps Tax Parity Act, legislation to ensure that nurses in the federal Nurse Corps do not need to pay income tax on their student loan forgiveness and scholarships.  

This legislation is also supported by Senators Kirsten Gillibrand (D-NY), Debbie Stabenow (D-MI), and Amy Klobuchar (D-MN).

“Frontline nurses have been the driving force getting our communities through this ongoing pandemic,” said Merkley. “These individuals continue to sacrifice their health and safety for the well-being of our country’s communities. It’s terrible public policy and frankly offensive that nurses are singled out for extra taxation as compared to other health professionals and it’s got to end.”

“Nurses across the country have been on the frontlines of this pandemic and providing lifesaving care for patients. But COVID-19 has burnt out so many people, and stretched our health care workforce to the breaking point,” said Murray. “Our country needs more nurses, which is why I am cosponsoring this bill to support our frontline health care workforce by putting more money in the pockets of people participating in a program that brings nursing professionals to underserved communities. I’m proud to join Senator Merkley in introducing the Nurse Corps Tax Parity Act, and I am going to keep pushing to pass this bill and take other meaningful steps to support our health care workers.”

“Nurses have been on the frontlines of the coronavirus pandemic for more than two years now,” said Wicker. “The nationwide shortage of nurses has made clear just how vital having skilled and hardworking health care professionals is to keeping our country running. I am glad to join Senator Merkley to introduce a measure that would expand opportunity and affordability for America’s future nurses by removing the tax for Nurse Corps student loan repayments.”

“Medical professionals are experiencing tremendous challenges right now,” said Boozman. “Encouraging nurses to bring their expertise to underserved communities is necessary to better serve patients where they live. Our legislation is a common sense approach to improving incentives for these health care heroes so rural populations will have access to the care they need.”

The National Health Service Corps (NHSC) and the Nurse Corps are two programs administered by the Health Resources and Services Administration (HRSA) aimed at delivering critical health care services in underserved areas. Both corps programs offer both scholarships and loan repayment for health care providers in exchange for service in these areas. Despite the similar missions and program offerings of the NHSC and Nurse Corps, NHSC scholarships and loan forgiveness are not subject to federal income tax, but Nurse Corps scholarships and loan forgiveness are.

“The Association of Rehabilitation Nurses thanks Senator Merkley for introducing the Nurse Corps Tax Parity Act. Patients requiring rehabilitative care – including those with brain injuries, stroke, COVID-19, and a wide variety of other conditions – count on rehabilitation nurses to provide high quality and safe care,” said Association of Rehabilitation Nurses President Jill Rye, DNP, RN, CRN, CNL, FARN. “The Nurse Corps Tax Parity Act will help trainee rehabilitation nurses to fully benefit from the Nurse Corps Scholarship Program, strengthening the nursing workforce and connecting patients in underserved areas to critical rehabilitation services.”

“The vital Nurse Corps program helps many people, including 2.4 million Americans in rural and underserved communities, get the high-quality care that they need,” said American Nurses Association President Dr. Ernest Grant, PhD, RN, FAAN. “By removing the tax on scholarships and loans provided by the Nurse Corps, this bill will bring it in line with other programs like the National Health Service Corps, which have enabled other health care professionals to work in high-need areas. I want to thank Senators Merkley and Wicker for their efforts on this legislation, which will enable more nurses to provide care to those who need it most.”

“From scholarship opportunities for nursing students to loan repayment for those already working in critical shortage facilities or at schools of nursing as nurse faculty, the Nurse Corps programs help increase access to healthcare service for those communities most in need,” said Dr. Deborah Trautman, President and CEO of the American Association of Colleges of Nursing. “We recognize the vital role our current and future nursing workforce has in our healthcare system, especially during this public health emergency, and look forward to working with Congress to move this bipartisan effort forward.”

“The Oncology Nursing Society supports Senator Merkley’s legislation that would provide new financial incentives for those serving in the Nurse Corps,” said Nancy Houlihan, MA, RN, AOCN, President of the Oncology Nursing Society. “This important bill would make a technical change that relieves nurses of the current tax burden associated with serving in the Nurse Corps, which other health care providers in similar programs currently do not face. Passage of the legislation will help ensure that nurses are working within critical workforce shortage areas across the country.”

Without a statutory exemption for the Nurse Corps, scholarships or loan repayments that can be considered compensation for services are taxable. To ensure parity in tax status between the NHSC and Nurse Corps, the Nurse Corps Tax Parity Act amends the Internal Revenue Code to create parity in tax treatment for scholarships and loan repayment between the NHSC and the Nurse Corps.

This legislation is endorsed by the American Nurses Association, the American Association of Colleges of Nursing, the American Association of Nurse Anesthesiology, the Association of Public Health Nurses, the Association of Rehabilitation Nurses, Friends of the National Institute of Nursing Research, and the Oncology Nursing Society.

The full text of the bill can be found here.