The Healthcare is Human Act of 2026 adds section 25G to the Internal Revenue Code to give licensed or certified health professionals a per-month federal tax credit for providing qualifying clinical services in designated facilities. The credit is tiered by hours worked each month ($300, $400, or $500) and is available only for individuals who meet hourly and minimum-month thresholds, work in VA facilities or facilities located in federally designated Health Professional Shortage Areas (and enrolled in Medicare/Medicaid), and whose modified adjusted gross income is below statutory caps.
The bill targets clinician retention and access in underserved and VA settings, includes specific exclusions for certain services and suppliers, sunsets after 2030, and requires a Government Accountability Office evaluation of the credit's effects on staffing, care continuity, and rural access. For compliance officers and tax teams, the bill creates new eligibility and documentation requirements, income-phase checks, and an administrative verification task for providers and the IRS if enacted.
At a Glance
What It Does
The bill creates a nonrefundable federal income tax credit for qualifying individuals equal to $300, $400, or $500 per calendar month depending on the number of qualifying clinical hours provided that month. It requires a minimum of eight calendar months with at least 80 qualifying hours each to claim the credit for a taxable year and terminates the credit after 2030.
Who It Affects
Individual licensed or certified health professionals (including VA-employed clinicians and non‑VA clinicians under VA agreements) who provide Medicare- or Medicaid-payable services in VA facilities or in facilities located in Health Professional Shortage Areas and enrolled in Medicare or Medicaid. The IRS, VA human-resources and contracting offices, and clinicians’ payroll or scheduling systems will handle verification and recordkeeping changes.
Why It Matters
This is a federal targeted workforce incentive tied to federal program participation and HPSA status rather than a grant or direct payment. It could shift staffing patterns toward qualifying sites, require tax and HR process changes to document hours and eligibility, and create measurable effects that the GAO will assess.
More articles like this one.
A weekly email with all the latest developments on this topic.
What This Bill Actually Does
The core of the bill is a new individual income tax credit (section 25G) that pays clinicians a fixed monthly amount based on how many qualifying clinical hours they work in a calendar month. Each month pays one of three amounts: $300 for more than 80 up to 120 hours, $400 for more than 120 up to 160 hours, and $500 for more than 160 hours.
A clinician cannot claim any credit for a year unless they worked at least 80 hours in each of at least eight calendar months in that taxable year.
To qualify, the clinician must be licensed, registered, or certified under federal or state law, and the services provided must be services for which payment may be made under Medicare (title XVIII) or Medicaid (title XIX) — with explicit exclusions such as durable medical equipment suppliers, personal care services, fiscal intermediary services, and certain home health or hospice when the individual is not the rendering or billing provider. Facilities count as qualifying if they are VA medical facilities or are located in a Health Professional Shortage Area and enrolled to bill Medicare or Medicaid.
The credit is capped by modified adjusted gross income: $400,000 for joint filers/surviving spouses and $200,000 for other filers.The statute treats the credit as an offset against the tax imposed by chapter 1 (i.e., a nonrefundable credit against income tax). The credit applies to tax years beginning after December 31, 2025, and terminates for tax years beginning after December 31, 2030.
The bill also directs the Government Accountability Office to study and report to Congress by June 30, 2030, on retention effects in shortage areas, impacts on quality and continuity of care in VA medical facilities (including community-based outpatient clinics) and VA non-Department providers under VA agreements, whether access improved in rural/underserved locations, and recommendations to improve targeting or effectiveness.Operationally, the bill places verification burdens on clinicians and facilities: clinicians will need to document monthly qualifying hours and the nature of services, facilities must ensure they meet the enrolled and HPSA-location criteria, and the IRS will need guidance and processes to verify claims and enforce the income limits. The exclusion list is narrow but meaningful — for example, services from DME suppliers and some personal care programs are out — which focuses the credit on clinical care reimbursable under Medicare/Medicaid and VA arrangements.
The Five Things You Need to Know
The credit pays $300/month for >80–120 hours, $400/month for >120–160 hours, and $500/month for >160 hours of qualifying services in a month.
Eligible clinicians must be licensed/certified and provide services payable by Medicare or Medicaid (with specific exclusions) at VA facilities or at facilities located in Health Professional Shortage Areas and enrolled in Medicare or Medicaid.
A clinician must work at least 80 hours in each of at least 8 calendar months of the taxable year before any credit is allowed for that year.
Modified adjusted gross income caps disqualify high earners: $400,000 for joint returns/surviving spouses and $200,000 for other filers; the credit applies to tax years beginning after 12/31/2025 and sunsets for tax years beginning after 12/31/2030.
The GAO must report to Congress by June 30, 2030 on retention in shortage areas, effects on VA facility care and community partners, rural/underserved access, and recommendations to improve targeting.
Section-by-Section Breakdown
Every bill we cover gets an analysis of its key sections.
Short title
Provides the Act’s short name, the 'Healthcare is Human Act of 2026.' This is purely stylistic but anchors references in subsequent implementing guidance and reports.
Allowance and structure of the credit
Defines the credit as an amount allowed against the tax imposed by chapter 1 and ties the dollar amount to calendar months and hour bands: $300, $400, $500. Practically, taxpayers will compute the credit by summing eligible months at the applicable rate. The statute does not make the credit refundable, so it reduces income tax liability but will not generate a refund beyond tax liability unless standard credit carryforward rules (if any) apply under existing law.
Who counts as a qualifying individual
Specifies that qualifying individuals are licensed, registered, or certified health professionals in good standing who provide qualifying services in qualifying facilities. This is broad (covers many clinician types) but requires licensure or certification under state or federal law, so volunteers or unlicensed aides won’t qualify. 'Good standing' triggers facility-level checks and potential credentialing documentation.
Qualifying services and qualifying facilities
Limits qualifying services to items or services payable under Medicare or Medicaid, with explicit exclusions (DME suppliers, personal care services, fiscal intermediary services, and certain home health or hospice when the provider isn’t the billing/rendering provider). Facilities qualify if they are VA medical facilities or are located in a federally designated Health Professional Shortage Area and enrolled to bill Medicare or Medicaid. That dual test (location in an HPSA plus Medicare/Medicaid enrollment) narrows eligible sites and ties the credit to federal program participation.
Income limits, minimum-month rule, and termination
Imposes modified adjusted gross income ceilings ($400k joint/$200k other) that block high earners from claiming the credit and defines MAGI for the purpose. The section also establishes a strict minimum participation rule: no credit unless the clinician had at least eight calendar months with 80+ qualifying hours. Finally, the credit terminates for tax years beginning after December 31, 2030, limiting the program to a short, defined window.
Effective date, clerical changes, and GAO report mandate
Sets the effective date to taxable years beginning after December 31, 2025, inserts the new section into the Code’s table of sections, and requires the Government Accountability Office to report to Congress by June 30, 2030 on retention, VA facility effects, rural/underserved access, and recommendations. The GAO mandate creates a statutory evaluation milestone tied to the program’s mid-term assessment.
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
- VA-employed clinicians and clinicians under VA agreements — They can receive a federal tax offset for work in VA medical facilities or in VA community-based settings, increasing take-home pay for clinicians who meet the hour thresholds.
- Clinicians practicing in Health Professional Shortage Areas (HPSAs) enrolled in Medicare/Medicaid — Those working at eligible non‑VA facilities in shortage areas get an earnings supplement via the tax code intended to improve retention and staffing stability.
- Rural clinics and community-based outpatient clinics — Improved clinician retention could stabilize staffing at small rural facilities that meet the qualifying criteria and bill Medicare/Medicaid.
- Patients in underserved and veteran communities — If the credit achieves its aim, veterans and underserved populations may see improved access and continuity of care where workforce shortages are acute.
- Tax and HR professionals at qualifying facilities — They gain a new tool to recruit and retain clinicians and can market positions as eligible for the credit, potentially easing hiring.
Who Bears the Cost
- Federal Treasury (taxpayers) — The credit reduces federal income tax receipts for as long as it’s claimed, representing lost revenue that must be weighed against workforce benefits.
- Internal Revenue Service — The IRS must implement verification, guidance, audit procedures, and systems changes to process the new credit and enforce income limits and eligibility.
- Small providers not enrolled in Medicare/Medicaid or not located in HPSAs — These providers receive no benefit and may experience workforce losses if clinicians migrate to qualifying sites.
- Qualifying facilities and their HR departments — They will face administrative burdens to document clinician hours, confirm licensure, and verify that services meet Medicare/Medicaid definitions; community providers contracting with VA may need new tracking and attestation processes.
- Clinicians who work irregular or primarily part-time schedules — The eight-month/80-hour-per-month floor and banded monthly structure may exclude clinicians who perform critical but intermittent services, effectively shifting benefits to more consistently-scheduled workers.
Key Issues
The Core Tension
The bill pits two legitimate goals—rapidly boosting clinician presence in underserved and VA settings versus keeping tax incentives simple and tightly targeted—against each other: aggressive targeting (HPSA location, Medicare/Medicaid enrollment, narrow service definitions, income caps, minimum-month thresholds) reduces waste but increases administrative complexity and excludes many irregular or itinerant clinicians who also serve needy populations. There is no clean technical fix that both perfectly targets shortage-area needs and keeps verification and compliance light.
The bill targets workforce shortages by tying a tax incentive to federal program participation and geographic shortage designations, but that targeting creates both implementation and behavioral headaches. The hourly banding and eight-month minimum are blunt instruments: they favor steady, longer-schedule clinicians and may leave out per‑diem staff, telehealth-only providers, or clinicians who split time across multiple non-qualifying sites.
Verifying the nature of services (Medicare/Medicaid-payable vs. excluded services) will require coordination among clinicians, billing offices, and potentially the VA to confirm whether care meets the statutory definition.
Administrative complexity is real. The IRS will need to specify how clinicians substantiate monthly hours and qualifying services, how facilities certify HPSA location and Medicare/Medicaid enrollment, and how to treat mixed-month work across qualifying and non-qualifying sites.
The income caps and MAGI definition add another layer: clinicians with volatile income (e.g., seasonal or part-time plus consulting) may find eligibility changes year-to-year. Finally, the five-year sunset compresses assessment: the GAO study is due in mid-2030, meaning Congress and agencies must collect and analyze data quickly to decide whether to extend or redesign the incentive, while short-term incentives may already have shifted staffing patterns that are costly to unwind.
Try it yourself.
Ask a question in plain English, or pick a topic below. Results in seconds.