This bill adds a new section to the Internal Revenue Code establishing a federal tax credit for individual nurse preceptors who provide supervised clinical training and mentoring tied to nursing education and early employment. The incentive is designed to increase the number of clinicians willing to precept nursing students and newly hired nurses in areas designated as health professional shortage areas.
The statute builds implementation steps into the tax code: it defines eligibility, requires third‑party certifications of hours served, obligates annual reporting to Congress on use of the credit, and includes a statutory expiration date. The approach uses a narrow, time‑limited tax incentive to try to relieve a key bottleneck in clinical training capacity in underserved communities.
At a Glance
What It Does
Creates a federal income tax credit worth $2,000 for each qualifying individual who serves as a nurse preceptor, conditioned on serving at least 200 hours in a location designated as a Health Professional Shortage Area (HPSA). The bill requires IRS publication of eligible HPSA areas and third‑party certification of precepting hours as a prerequisite to claiming the credit.
Who It Affects
Licensed registered nurses and other health care providers acting as preceptors in HPSAs, schools of nursing and clinical placement sites that must certify hours, the IRS and Treasury for administration and reporting, and HRSA for consultation during evaluation. Taxpayers claiming the credit will interact with their employers, partnering academic institutions, or clinical sites to secure necessary certifications.
Why It Matters
This law ties a tax incentive directly to clinical education capacity in underserved areas rather than broad workforce subsidies. For compliance officers and finance teams it creates a new year‑by‑year tax compliance task and for nursing programs it changes how clinical placements may be prioritized and documented.
More articles like this one.
A weekly email with all the latest developments on this topic.
What This Bill Actually Does
The bill inserts a new section into the Internal Revenue Code establishing a per‑individual tax credit for people who act as nurse preceptors. Rather than subsidizing institutions, the credit goes to the individual clinician who provides the hands‑on supervision and mentoring that nursing students and newly hired nurses need to complete clinical training and transition into practice.
The statute limits the credit geographically by tying eligibility to areas that qualify as Health Professional Shortage Areas under the Public Health Service Act and directs the IRS to publish the list of eligible areas annually.
Eligibility depends on a minimum service threshold: an individual must serve at least 200 hours in precepting activities during the taxable year. The bill sets out two certification routes: an academic institution can certify hours served giving clinical supervision to enrolled nursing students, or a clinical employer can certify hours spent precepting newly hired nurses during their first six months.
The statute explicitly allows combining certifications from multiple institutions or sites to reach the 200‑hour minimum.The credit is claimed on the individual's federal income tax return as an amount equal to $2,000 for the taxable year; the text frames the credit as an allowance against tax under chapter 1. The provision is time‑limited: it applies beginning for taxable years after December 31, 2025, and it terminates for taxable years starting after December 31, 2032.
The bill also amends the code table of sections to add the new section number and contains a clause directing the Treasury to produce annual usage reports to specific congressional committees and a final effectiveness evaluation—conducted with HRSA—after the program concludes.Operationally, the statute creates multiple administrative touchpoints. Academic institutions and clinical sites become certifying agents for hours; the IRS must maintain and publish the list of qualifying shortage areas; Treasury will collect and report aggregated taxpayer and geographic data each year; and, at the end of the program, Treasury in consultation with HRSA will evaluate whether the credit increased the number of preceptors.
Those reporting and evaluation requirements create both transparency and administrative burden that agencies and institutions must plan for when implementing the credit.
The Five Things You Need to Know
The credit amount is fixed at $2,000 per eligible nurse preceptor for each taxable year in which the individual meets the requirements.
An individual must serve at least 200 hours in the taxable year as a nurse preceptor to qualify; the statute calls this the "minimum required hours of preceptorship.", Eligibility is limited to service performed in locations designated as Health Professional Shortage Areas (HPSAs) under section 332 of the Public Health Service Act; the IRS must publish the list of qualifying areas annually.
Claiming the credit requires third‑party certification: either a partnering academic institution certifies student precepting hours or the clinical employer certifies hours mentoring newly hired nurses; multiple certifications may be combined to meet the 200‑hour threshold.
The credit takes effect for taxable years beginning after December 31, 2025, terminates for taxable years beginning after December 31, 2032, and includes annual Treasury/IRS reporting plus a post‑program evaluation with HRSA.
Section-by-Section Breakdown
Every bill we cover gets an analysis of its key sections.
Act name and shorthand
Provides the public name of the statute: the Providing Real‑world Education and Clinical Experience by Precepting Tomorrow’s Nurses Act (PRECEPT Nurses Act). This is a purely formal provision but sets the branding that agencies and stakeholders will use in guidance and rulemaking documents.
Creates the new tax credit section
Adds section 25F to subpart A of part IV of subchapter A (chapter 1) of the Internal Revenue Code to establish the legal vehicle for an individual tax credit payable against federal income tax liability. This is the central statutory hook the IRS will apply when preparing forms, instructions, and procedures to accept claims.
Defines 'eligible nurse preceptor' and related terms
Sets key eligibility rules: an 'eligible nurse preceptor' is an individual who serves at least 200 hours in an HPSA during the taxable year; 'nurse preceptor' is defined broadly to include licensed RNs or other health care providers as that term is used in the Public Health Service Act; 'relevant academic institution' and 'newly hired' (first six months) are defined to clarify certification sources. These definitions narrow the credit to on‑site clinical mentoring rather than classroom teaching or administrative supervision.
Requires third‑party certifications of hours
Imposes a prerequisite to claiming the credit: taxpayers must possess a certification proving they met the 200‑hour minimum. The statute prescribes two certification routes—academic institutions certify student precepting hours and clinical employers certify hours mentoring newly hired nurses—and expressly permits aggregating multiple certifications. Practically, this makes institutions and employers gatekeepers for eligibility and creates documentation and verification responsibilities.
Sunset date for the credit
Specifies that the new section will not apply to taxable years beginning after December 31, 2032. The finite term frames the credit as a temporary experiment, affecting planning horizons for institutions and individuals and signaling that Congress expects an evaluation before deciding on continuation or expansion.
Technical adjustments and when the credit starts
Makes a clerical insertion into the Code's table of sections and states the effective date: the amendments apply to taxable years beginning after December 31, 2025. Compliance teams must therefore prepare for the first set of returns and certifications for calendar year 2026 filings.
Annual reporting requirements and final evaluation
Directs the Treasury (or delegated official) to report each year—beginning with taxable years starting in calendar year 2026—on the number of taxpayers claiming the credit, aggregated hours, and geographic distribution, and to deliver an evaluation of program effectiveness by June 30, 2033, in consultation with HRSA. Those mandates create explicit data collection needs and require cooperation between IRS, Treasury, HRSA, academic institutions, and clinical sites.
This bill is one of many.
Codify tracks hundreds of bills on Healthcare across all five countries.
Explore Healthcare in Codify Search →Who Benefits and Who Bears the Cost
Every bill creates winners and losers. Here's who stands to gain and who bears the cost.
Who Benefits
- Experienced nurses and health care providers serving as preceptors — they receive a direct, individual tax incentive for dedicating time to clinical supervision, lowering the opportunity cost of precepting.
- Nursing students and newly hired nurses in HPSAs — by incentivizing precepting in shortage areas, the bill aims to expand available supervised clinical placements and improve onboarding capacity in underserved communities.
- Rural and underserved patient communities — increased precepting capacity in HPSAs can enlarge local clinical training activity, which may translate into stronger pipelines for local hiring and retention of clinicians.
Who Bears the Cost
- The federal Treasury — the credit reduces tax receipts; the magnitude will depend on uptake and is an explicit cost item for budget and revenue estimates.
- Academic institutions and clinical employers — they must verify and certify hours, change internal documentation and compliance procedures, and allocate staff time to produce certifying documents.
- IRS and Treasury — they must publish HPSA lists annually, build claim processing rules, collect new data for mandated reports, and conduct the mandated evaluation (with HRSA), creating administrative and IT costs.
- Individual preceptors — while they receive the credit, they will carry the documentation burden and, for those whose tax liability is less than the credit, may not realize full value depending on the credit’s interaction with other tax provisions.
Key Issues
The Core Tension
The bill balances two legitimate aims—rapidly expanding clinical training capacity in underserved areas and keeping the tax incentive administratively simple and time‑limited—but those goals conflict: a narrowly targeted, low‑value credit minimizes fiscal exposure and implementation complexity yet may fail to change behavior meaningfully; a larger or more flexible incentive would likely be more effective but would raise fiscal costs and administrative complexity.
The statute targets a narrowly defined behavioral change—encouraging clinicians to spend paid time precepting in designated shortage areas—using a flat, per‑individual tax credit. That design trades simplicity for bluntness: a $2,000 annual credit may not be sufficient to offset the full opportunity cost of 200 hours of skilled clinical labor in many markets, raising the question whether the incentive will materially change precepting decisions.
Conversely, a small fixed credit simplifies administration but risks paying many marginal preceptors whose behavior may not have required a financial nudge.
The certification mechanism transfers verification responsibility to academic institutions and clinical employers but leaves unanswered how the IRS will audit and validate certifications or prevent double‑counting across institutions. The requirement that qualifying service occur only in HPSAs concentrates benefits geographically, which aligns with an equity goal but may create distortions: clinical sites just outside HPSA boundaries could lose preceptors, while sites inside HPSAs could attract them, potentially shifting placement pressure rather than increasing overall capacity.
Finally, the program’s fixed sunset limits long‑term investment by institutions into new preceptor support structures and may complicate workforce planning if Congress does not act before termination.
Try it yourself.
Ask a question in plain English, or pick a topic below. Results in seconds.