This bill amends the tax code to ensure that scholarships and loan repayments received through the Nurse Corps program are exempt from federal income tax.
Roger Wicker
Senator
MS
The Nurse Corps Tax Parity Act of 2025 amends the Internal Revenue Code to update the tax treatment of payments received under the Nurse Corps program. It modifies sections 108(f)(4) and 117(c)(2)(A) to include references to section 846 of the Public Health Service Act, ensuring that scholarships and loan repayments received through the Nurse Corps program are treated consistently for tax purposes. These changes will be effective for taxable years beginning after the enactment of this act.
Proposed Bill Aims to Make Nurse Corps Scholarships and Loan Repayments Tax-Free
The "Nurse Corps Tax Parity Act of 2025" has been introduced, and its primary aim is to ensure that specific financial benefits received through Nurse Corps programs—namely scholarships and loan repayments—are not considered taxable income. It proposes updates to the Internal Revenue Code of 1986, with these changes intended to apply to amounts received in taxable years after the bill's enactment.
Decoding the Fine Print: Tax Code Tweaks for Nurses
So, what's changing under the hood? The bill targets two specific sections of the Internal Revenue Code to achieve its goal. First, it modifies section 108(f)(4), which deals with when forgiven student loan amounts can be excluded from gross income. The proposed change would add a reference to section 846 of the Public Health Service Act (which encompasses certain Nurse Corps programs), effectively making loan repayments under these specific Nurse Corps initiatives explicitly tax-exempt.
Second, the bill seeks to update section 117(c)(2)(A). This part of the tax code already allows scholarships from programs like the National Health Service Corps Scholarship Program to be tax-free, even if they require a service commitment. The amendment would extend this same favorable tax treatment to scholarships received under the Nurse Corps programs specified in section 846 of the Public Health Service Act.
More Money in Your Pocket? The Real-World Impact for Nurses
For current and aspiring nurses considering or participating in these Nurse Corps programs, this bill could translate directly to more money staying with them. If these benefits become officially non-taxable, participants wouldn't have to report them as income, potentially saving a significant amount in taxes. For instance, if a nursing student receives a $30,000 scholarship through a qualifying Nurse Corps program, or a working nurse gets $25,000 in loan repayment, this bill intends for that full amount to be theirs, free from federal income tax. This effectively increases the net value of these awards, making participation in the Nurse Corps financially more appealing.
The Bigger Picture: A Healthier Outlook for Healthcare Access?
The underlying goal of such a tax change is often to strengthen the programs it affects. By making Nurse Corps scholarships and loan repayments tax-exempt, the bill could serve as a greater incentive for individuals to join the Nurse Corps. These programs play a vital role in staffing healthcare facilities in underserved areas, both urban and rural, where access to medical professionals can be limited. If more nurses are encouraged to participate due to the enhanced financial benefits, it could lead to improved healthcare access for communities that need it most, potentially helping to alleviate nursing shortages in critical regions.