2026 SESSION

INTRODUCED

26105400D

HOUSE BILL NO. 1123

Offered January 14, 2026

Prefiled January 14, 2026

A BILL to amend the Code of Virginia by adding in Article 3 of Chapter 3 of Title 58.1 a section numbered 58.1-339.15, relating to income tax; credit for certain health care providers.

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Patrons—Thornton, Anderson, Clark, Guzman, Rasoul, Schmidt and Shin; Senators: Jones, Marsden and Salim

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Referred to Committee on Finance

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Be it enacted by the General Assembly of Virginia:

1. That the Code of Virginia is amended by adding in Article 3 of Chapter 3 of Title 58.1 a section numbered 58.1-339.15 as follows:

§ 58.1-339.15. Tax credit for certain health care providers.

A. For purposes of this section:

"Eligible health care provider" means any nurse practitioner jointly licensed by the Boards of Medicine and Nursing pursuant to § 54.1-2957; physician assistant licensed by the Board of Medicine; doctor licensed to practice medicine or osteopathic medicine by the Board of Medicine; advanced practice registered nurse, as such term is defined in § 54.1-3000; registered professional nurse licensed to practice professional nursing as defined in § 54.1-3000; individual authorized to provide behavioral health services, as defined in § 37.2-100; social worker, as such term is defined in § 54.1-3700; individual authorized by the Board of Counseling to provide therapeutic services; or veterinarian authorized to practice veterinary medicine in accordance with Chapter 38 (§ 54.1-3800 et seq.) of Title 54.1.

"Underserved community" means an area within the Commonwealth identified by the Board of Health as medically underserved in accordance with § 32.1-122.5.

B. For taxable years beginning on and after January 1, 2026, but before January 1, 2031, an eligible health care provider shall be allowed to claim a nonrefundable credit against the tax levied pursuant to § 58.1-320 in an amount equal to $5,000 for providing health care for at least 1,600 hours during the taxable year in an underserved community.

C. For taxable years beginning on and after January 1, 2026, but before January 1, 2031, an eligible health care provider that is unable to claim the credit pursuant to subsection B shall be allowed to claim a nonrefundable credit against the tax levied pursuant to § 58.1-320 in an amount equal to $2,500 for providing health care for at least 800 hours during the taxable year in an underserved community.

D. An eligible health care provider shall only be able to claim a credit pursuant to this section for two taxable years. The amount of the credit that may be claimed in any single taxable year shall not exceed the individual's liability for taxes imposed by this chapter for that taxable year. If the amount of the credit allowed under this section exceeds the individual's tax liability for the taxable year in which such credit is claimed, the amount that exceeds the tax liability may be carried over for credit against the income taxes of the individual in the next five taxable years or until the total amount of the tax credit has been taken, whichever is sooner. The aggregate amount of credits allowable under this section shall not exceed $5 million per taxable year. Credits shall be allocated by the Department on a first-come, first-served basis.

E. The Tax Commissioner shall, in consultation with the Board of Health, develop guidelines for claiming the credit provided by this section. Such guidelines shall be exempt from the provisions of the Administrative Process Act (§ 2.2-4000 et seq.).