The Internal Revenue Service announced that health care professionals who received student loan relief under state programs that reward those who work in underserved communities may qualify for refunds on their 2009 federal income tax returns as well as an annual tax cut going forward under a new provision in the Affordable Care Act. Employers, including tax-exempt employers, in underserved areas can help eligible health professionals take advantage of this new benefit.
Employers of eligible medical professionals who withheld and paid taxes under the Federal Insurance Contributions Act (FICA) on payments covered under the new exclusion may seek a refund of withheld FICA on the employee’s behalf. Also, because employers also pay a portion of the FICA tax, the employer also may be entitled to a refund as well.
For more information on the Affordable Care Act provisions as well as news releases and other legal guidance, go to IRS.gov.