STATE OF NEW JERSEY
221st LEGISLATURE
PRE-FILED FOR INTRODUCTION IN THE 2024 SESSION
Sponsored by:
Assemblywoman TENNILLE R. MCCOY
District 14 (Mercer and Middlesex)
SYNOPSIS
Allows gross income tax deductions totaling $300,000 over five taxable years for certain primary care physicians.
CURRENT VERSION OF TEXT
Introduced Pending Technical Review by Legislative Counsel.
An Act allowing a gross income tax deduction over five taxable years for certain primary care physicians who practice in the State, supplementing Title 54A of the New Jersey Statutes.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. a. A qualified primary care physician shall be allowed a one time deduction of $100,000 of income derived from the qualified New Jersey professional practice, and in each of the four successive taxable years thereafter the allowable deduction shall be reduced by $20,000 each year, provided that the physician continues to maintain a qualified New Jersey professional practice for the five taxable years. The total amount of deductions allowed pursuant to this section for the five taxable years shall not exceed $300,000. In the event that the qualified primary care physician does not maintain a qualified New Jersey professional practice for the five taxable years, the physician shall be liable for repayment to the State of the full amount of the gross income tax liability that would have been due if the deductions had not been taken. The Director of the Division of Taxation in the Department of the Treasury may exempt a taxpayer from some or all repayment as the director deems necessary to alleviate undue hardship.
b. As used in this section:
"Qualified New Jersey professional practice" means engaging in the following activities within the State as a qualified primary care physician: providing medical diagnoses, exercising medical judgments, communicating medical judgments and diagnoses to patients and other healthcare providers and the performance of medical tasks such as, but not limited to, physical examinations and surgical procedures.
"Qualified primary care physician" means a taxpayer who is a State-licensed physician engaged in the practice of family medicine, general internal medicine, general pediatrics, or general obstetrics or gynecology.
2. This act shall take effect immediately and apply to taxable years ending after the effective date.
STATEMENT
This bill provides a gross income tax deduction totaling $300,000 over five taxable years for certain primary care physicians who practice in New Jersey. The purpose of the bill is to encourage primary care physicians to continue to practice in New Jersey and for newly qualified physicians to stay in New Jersey to practice.
To qualify for the deduction, a physician must be a taxpayer engaged in the practice of family medicine, general internal medicine, general pediatrics or general obstetrics or gynecology in the State. The initial allowable deduction of $100,000 in the first taxable year is reduced by $20,000 per year in each of the four following taxable years.
It is estimated that the supply of primary care physicians will continue to fall short of demand in the coming years due to the number of physicians who are nearing retirement age, a shortage of residency programs, and the recent influx of great numbers of newly insured patients brought about by the federal Affordable Care Act. This bill provides an incentive for primary care physicians to practice in the State by reducing their income tax liability.