HB 1400 creates a new Indiana income tax credit for certain licensed health professionals who serve as unpaid preceptors in medical education. A qualifying clinician must provide at least 140 hours of personalized instruction or training in a taxable year to a student completing required clinical rotations for a professional degree. The bill defines eligible clinicians broadly to include advanced practice registered nurses, pharmacists, physicians, physician assistants, and psychologists, and it limits eligible students to those enrolled in specified Indiana programs such as medical school, physician assistant, APRN, psychology, and pharmacy programs.
The credit is available against state adjusted gross income tax liability for taxable years beginning after December 31, 2025. The credit amount is the lesser of $1,000 per clinical rotation or $12,000 per year. Taxpayers must claim the credit on their annual return and provide documentation the Department of Revenue requires to verify eligibility. If the department later determines the taxpayer did not perform the required unpaid instruction or was otherwise compensated for it, it may assess back the amount of the credit within five years and deposit recovered amounts into the state general fund.
Impact
The bill would add a new chapter to Indiana Code concerning taxation, specifically IC 6-3.1-40.2, and would create a new refundable-style incentive structure in the form of a nonrefundable credit against state income tax liability. It would affect licensed clinicians who supervise students in clinical rotations and could reduce state tax revenue to the extent credits are claimed. It also gives the Department of Revenue authority to administer, verify, and recapture improperly claimed credits, and it establishes a five-year lookback for assessments.
Sentiment
Based on the bill’s caption and structure, the measure appears generally supportive of medical education and workforce development by compensating clinicians for unpaid teaching time through a tax incentive. There is no committee transcript or recorded vote history provided, so there is no direct evidence of debate, amendments, or formal support/opposition in the available materials. The bill’s design suggests an intent to encourage participation in precepting rather than to create a broad tax benefit.
Contention
The main potential point of contention is the cost to the state through reduced tax collections versus the policy goal of expanding clinical training opportunities. Another likely issue is eligibility: the bill limits the credit to specific licensed clinicians, specific Indiana educational programs, and unpaid instruction meeting a 140-hour threshold, which may exclude some preceptors or training arrangements. Administrative verification and the recapture provision may also raise concerns about compliance burden and enforcement for both taxpayers and the Department of Revenue.