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Legislation reduces taxes for veterinarians in rural areas

Incentives offered for veterinarians to practice in underserved areas.

Jacqui Fatka

June 30, 2021

2 Min Read
Veterinarian cattle barn dusanpetkovic 1202586756.jpg
RURAL VETERINARIAN FINANCIAL AID: Veterinary Medicine Loan Repayment Program Enhancement Act exempts from federal income withholding tax for payments received under the loan forgiveness program. iStock

Bipartisan legislation introduced by Sens. Debbie Stabenow, D-Mich., and Mike Crapo, R-Idaho, would address the shortfall of veterinarians in rural areas by offering tax relief. The Veterinary Medicine Loan Repayment Program Enhancement Act would help meet the growing demand for veterinarians nationwide by eliminating taxes on programs that encourage veterinarians to practice in underserved areas.

“Veterinarians provide essential support for the agricultural economy in so many rural areas and small towns in Michigan and nationwide,” says Stabenow. “But too many places lack the veterinary services they need. This bipartisan bill will provide incentives for veterinarians to practice in underserved areas, where quality veterinary care is needed to ensure healthy livestock and a safe food supply.”

To help address the shortage in essential veterinary services in rural areas across the country, Congress in 2003 established the Veterinary Medicine Loan Repayment Program which provides food animal and public health veterinarians up to $25,000 a year for student loan repayment in exchange for at least three years of service in one USDA’s designated rural veterinary shortage areas. The USDA declared 221 shortage areas in 48 states for 2021. 

This program helps veterinarians pay down their student loan debt so that they can afford to start a practice where it’s most needed.

Currently, the VMLRP is subject to a significant federal withholding tax on the assistance provided to qualifying veterinarians. This limits the resources available for the program, as well as the reach of its benefits. The Stabenow-Crapo legislation will address this by providing an exemption from the federal income withholding tax for payments received under the VMLRP and similar state programs, helping give more veterinarians the opportunity to practice in small, rural communities where their services are needed.

“Qualified veterinarians in agricultural communities across the nation are a key part of maintaining animal health and welfare, and ensuring ranchers and farmers have access to care for their livestock,” notes Crapo. “Overly burdensome federal taxes on the Veterinary Medicine Loan Repayment Program limit the reach of the program’s benefits, and addressing those limitations would allow more veterinarians to have the opportunity to practice in small, rural communities where their services are in critical need.”

“Expanding the VMLRP means more veterinarians will receive student loan relief and there will be more access to veterinary care in rural areas across the country – a win-win for the profession,” says Dr. Douglas Kratt, president of the American Veterinary Medical Association.

AVMA sent a notice out to its members June 28 calling on them to contact their legislators urging support.

Kratt notes the AVMA is grateful to the leaders in Congress for supporting legislation that removes the tax on service awards and maximizes the effectiveness of the VMLRP. “We will use this momentum to build broad support for the bill and send it to the President’s desk,” he says.


About the Author(s)

Jacqui Fatka

Policy editor, Farm Futures

Jacqui Fatka grew up on a diversified livestock and grain farm in southwest Iowa and graduated from Iowa State University with a bachelor’s degree in journalism and mass communications, with a minor in agriculture education, in 2003. She’s been writing for agricultural audiences ever since. In college, she interned with Wallaces Farmer and cultivated her love of ag policy during an internship with the Iowa Pork Producers Association, working in Sen. Chuck Grassley’s Capitol Hill press office. In 2003, she started full time for Farm Progress companies’ state and regional publications as the e-content editor, and became Farm Futures’ policy editor in 2004. A few years later, she began covering grain and biofuels markets for the weekly newspaper Feedstuffs. As the current policy editor for Farm Progress, she covers the ongoing developments in ag policy, trade, regulations and court rulings. Fatka also serves as the interim executive secretary-treasurer for the North American Agricultural Journalists. She lives on a small acreage in central Ohio with her husband and three children.

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