A student loan assistance program that helps place veterinarians in underserved rural areas would be exempt from federal withholding tax under a bill recently introduced in Congress.
Congressmen Adrian Smith, R-Neb., and Ron Kind, D-Wis., introduced H.R. 3095, the Veterinary Medicine Loan Repayment Program (VMLRP) Enhancement Act, on July 16 to place the program on the same tax code playing field as a similar financial incentive for medical doctors.
National Health Service Corps repayments are exempt from federal withholding taxes, and the proposed bill would provide a similar exemption for VMLRP, Rep. Smith said.
“Farmers and ranchers depend on veterinarians to help maintain our first class food safety system,” Smith said. “This bill addresses a discrepancy in our outdated tax code to ease compliance for veterinarians who choose to serve where they are needed most.”
VMLRP provides reimbursements – paying off up to $25,000 annually in student loan debt – to veterinarians who choose to practice for three years in federally designated shortage areas.
Veterinarians face an average $135,287 in student debt, according to industry reports.
Without the tax exemption, VMLRP loan repayments are subject to a 39 % withholding tax, which means the Internal Revenue Service takes 39 cents of every dollar Congress appropriates to the program.
Legislation exempting the program from withholding tax was introduced in the last congressional session but failed to pass.
Administered by the U.S. Department of Agriculture, the VMLRP has placed nearly 300 veterinarians in 45 states, Puerto Rico and on U.S. federal lands since 2010.
“The critical services large animal veterinarians provide to communities in western and central Wisconsin helps maintain both the safety of our food and the health and welfare of our livestock,” Rep. Kind said. “… This legislation would encourage more veterinarians to locate to the places of highest need.”
To learn more about VMLRP and how to participate in the program, visit http://nifa.usda.gov/program/veterinary-medicine-loan-repayment-program