LEGISLATIVE SERVICES AGENCY
OFFICE OF FISCAL AND MANAGEMENT ANALYSIS
FISCAL IMPACT STATEMENT
LS 6722 NOTE PREPARED: Jan 9, 2025
BILL NUMBER: HB 1400 BILL AMENDED:
SUBJECT: Tax Credit for Preceptors in Medical Education.
FIRST AUTHOR: Rep. Manning BILL STATUS: As Introduced
FIRST SPONSOR:
FUNDS AFFECTED:XGENERAL IMPACT: State
DEDICATED
FEDERAL
Summary of Legislation: The bill provides a credit against the state tax liability of a qualified clinician
(preceptor) in medical education who provides to a student in a particular taxable year, in return for no
compensation as a preceptor, at least 140 hours of personalized instruction or training related to the student's
clinical rotations required to obtain a professional degree. It provides that the amount of the credit allowable
is equal to the lesser of: (1) $1,000 for each clinical rotation for which the qualified taxpayer provided the
required instruction or training during the taxable year; or (2) $12,000 per taxable year.
Effective Date: July 1, 2025.
Explanation of State Expenditures: Department of State Revenue (DOR): The DOR will incur additional
expenses to revise tax forms, instructions, and software to reflect the changes made by the bill. The DOR
would have additional workload under the bill to accept information submitted by the taxpayer to verify the
taxpayer’s eligibility. The DOR would also be required to impose an assessment on any taxpayer who is
determined ineligible for the credit in the five years after claiming the credit. The DOR's current level of
resources should be sufficient to implement these changes.
Explanation of State Revenues: The bill could decrease state General Fund revenue by an estimated $26
M per year beginning in FY 2027. The bill creates a nonrefundable Adjusted Gross Income (AGI) Tax credit
for taxpayers who are eligible medical clinicians who provide preceptorship. The credit could be claimed
beginning in tax year 2026.
Additional Information - An estimated 67,000 licensed professionals in Indiana meet the definition of eligible
clinicians under the bill. Eligible clinicians include the following: advanced practice registered nurses,
pharmacists, physicians, physician assistants, and psychologists. The estimate is based on claim amounts
for Hawaii’s preceptor tax credit program adjusted for the comparative size of Indiana’s and Hawaii’s
medical workforce.
Under the bill, a clinician who provides at least 140 hours of uncompensated preceptorship would be eligible
for a nonrefundable tax credit equal to the lesser of $12,000 or $1,000 for each clinical rotation completed
HB 1400 1 by the student for whom the qualified taxpayer provided the required instruction or training.
If the DOR determines within five years that a taxpayer who received the tax credit either did not perform
the required instruction or training required to receive the credit or that the individual was compensated for
the instruction or training, the taxpayer would be assessed by DOR for the value of the credit received.
Explanation of Local Expenditures:
Explanation of Local Revenues:
State Agencies Affected: Department of State Revenue.
Local Agencies Affected:
Information Sources: State of Indiana’s Health Workforce 2024 Report.
https://www.in.gov/pla/files/Annual-Report-of-the-State-of-Indianas-Health-Workforce-2024.pdf; Evaluation
of Hawai’i Preceptor Tax Credit Program. Five Year Program Evaluation 2019-2023.
https://preceptortaxcredit.hawaii.edu/wp-content/uploads/2024/06/PTC2024-FINAL-Act-43-SLH-2018-P
rogram-Eval.pdf
Fiscal Analyst: Camille Tesch, 317-232-5293.
HB 1400 2