# COMAR Title 10 — Maryland Department of Health

## Subtitle 01 — Procedures

### Chapter 01 — Income Tax Credits for Preceptors in Areas with Health Care Workforce Shortages

**Authority:** Tax-General Article, §§10-738, 10-739, 10-739-1, and 10.752, Annotated Code of Maryland

**Administrative History:** Effective date: January 29, 2018 (45:2 Md. R. 68)

**Administrative History:** Chapter revised effective September 19, 2022 (49:19 Md. R. 868)

**Administrative History:** Chapter revised effective March 2, 2026 (53:4 Md. R. 184)

#### Regulation .01 Purpose.

*COMAR 10.01.01.01*

A. The purpose of this chapter is to establish regulatory provisions related to the State income tax credit program for the following qualified health care practitioners who serve as preceptors without compensation in health care workforce shortage areas:

  (1) Physicians;

  (2) Advanced practice registered nurses;

  (3) Physician assistants;

  (4) Registered nurses; and

  (5) Licensed practical nurses.

B. This chapter describes the procedures used by the Maryland Department of Health to assess eligibility of applicants, process applications, and certify income tax credits for approved applications.

#### Regulation .02 Definitions.

*COMAR 10.01.01.02*

A. In this chapter, the following terms have the meanings indicated.

B. Terms Defined.

  (1) “Applicant” means an individual:

    (a) Who has submitted an application to the Department requesting State income tax credit; and

    (b) Whose status for receipt of a tax credit certification has not yet been determined.

  (2) “Department” means the Maryland Department of Health.

  (3) “Health Care Practitioner” means an individual who is:

    (a) A health care practitioner, as defined in Tax-General Article, §10–752, Annotated Code of Maryland;

    (b) An advanced practice registered nurse as defined in Health Occupations Article, §8-101, Annotated Code of Maryland;

    (c) A registered nurse as defined in Health Occupations Article, §8-101, Annotated Code of Maryland; or

    (d) A licensed practical nurse as defined in Health Occupations Article, §8-101, Annotated Code of Maryland.

  (4) “Health care workforce shortage area” means:

    (a) A health professional shortage area;

    (b) A medically underserved area;

    (c) A medically underserved population;

    (d) Federally designated rural areas;

    (e) State defined shortage areas;

    (f) State defined rural areas; or

    (g) Other areas defined as in need by the Secretary of Health or Governor or as otherwise determined by the Department in consultation with the Governor’s Workforce Development Board.

  (5) “Income tax credit” means a nonrefundable credit against State income tax.

  (6) “Preceptor” means a health care practitioner participating in a preceptorship program.

  (7) “Preceptorship program” has the meaning as stated in Tax-General Article, §§10–738, and 10-752, Annotated Code of Maryland.

  (8) “Rotation” means a minimum of:

    (a) 100 hours of community-based clinical training between a:

      (i) Medical student and a licensed physician preceptor;

      (ii) Physician assistant student and a licensed physician, nurse practitioner, or physician assistant preceptor in family medicine, general internal medicine, or general pediatrics practice or setting; or

    (b) 90 hours of community-based clinical training between a:

      (i) Nurse practitioner student and a licensed physician or nurse practitioner preceptor;

      (ii) A registered nurse student and an advanced practice registered nurse or registered nurse preceptor; or

      (iii) A licensed practical nurse student and an advanced practice registered nurse, registered nurse, or licensed practical nurse preceptor.

  (9) “Taxable year” means the annual accounting period for keeping records and reporting income and expenses that starts on January 1 and ends on December 31 of the same year.

#### Regulation .03 Program Eligibility.

*COMAR 10.01.01.03*

A healthcare practitioner preceptor in a preceptorship program is eligible for an income tax credit if the individual served:

A. Without compensation for a minimum of three rotations; and

B. In a health care workforce shortage area.

#### Regulation .04 Application Procedures.

*COMAR 10.01.01.04*

A. Applicant.

  (1) By the published deadlines, on the form designated by the Department, an applicant shall:

    (a) Submit a complete application to the Department;

    (b) Facilitate submission of application components by all contributors; and

    (c) Provide any supporting documentation as requested by the Department.

  (2) An applicant may voluntarily withdraw the application without prejudice.

  (3) An applicant may submit a new application subject to §B of this regulation.

B. The Department shall receive applications by January 5 for the previous taxable year during which rotations were completed.

C. The Department shall:

  (1) Accept applications received during the application period for Department review;

  (2) Approve the application if the:

    (a) Application is complete;

    (b) Applicant is determined to be eligible; and

    (c) Funds are available in the appropriate Fund based on precepted student type;

  (3) Disapprove an application if the application:

    (a) Fails to provide sufficient information or comply with requested documentation to determine eligibility;

    (b) Has the appropriate documentation but is determined to be ineligible; or

    (c) Does not satisfy the requirements established by law or the Department; and

  (4) Provide the applicant with written notice of the final disposition of the application within 45 calendar days of receipt of an application.

D. Appeal of Disapproval of Application.

  (1) An applicant may appeal the decision to disapprove an application by submitting an appeal request in writing to the Department within 30 calendar days of the date on the notice of the disapproved application.

  (2) If an applicant submits an appeal, the Department, within 60 calendar days of receipt of the appeal, shall:

    (a) Sustain or reverse the decision on the application; and

    (b) Provide written notice to the applicant:

      (i) Indicating whether the decision on the application has been sustained or reversed; and

      (ii) Providing an explanation of the decision.

  (3) An applicant may request a hearing within 10 calendar days after the date of written notice of the Department’s disapproval of an application as stated in §D(2) of this regulation. Following receipt of the request, the Department shall follow hearing procedures in accordance with COMAR 10.01.03.

  (4) Failure to be present for the hearing without prior notice, communication, or approval from the Department may result in:

    (a) The appeal nullified and decision sustained;

    (b) The hearing on the appeal not being rescheduled; or

    (c) Appropriate sanctions as determined by the Department.

#### Regulation .05 Verification and Audit of Income Tax Credits.

*COMAR 10.01.01.05*

A. The Department may:

  (1) Request from an applicant additional information to verify statements in an application; and

  (2) Use independent verification, such as a preceptor list and preceptor completion letters received by the medical and nursing schools, to verify information reported on an application for an income tax credit.

B. The Comptroller shall retain its audit authority under Tax-General Article, Annotated Code of Maryland.

#### Regulation .06 Income Tax Credits.

*COMAR 10.01.01.06*

A. On approval of an application, the Department shall issue an income tax credit certificate to the approved healthcare practitioner in the amount of $1,000 for each qualifying student rotation for which the healthcare practitioner served as a preceptor.

B. Income tax credits shall be issued for the taxable year of the application during which the health care practitioner served without compensation.

C. The total amount of an income tax credit allowed for an individual in a taxable year may not exceed the:

  (1) Maximum credit amount as indicated in Tax-General Article, §§10–738, 10-739, 10-739.1, and 10-752, Annotated Code of Maryland; or

  (2) State income tax imposed for that individual for that taxable year.

D. Any unused amount of an income tax credit for a taxable year may not be carried over to any other taxable year by the preceptor, as referenced in Tax-General Article, §§10–738, 10-739, 10-739.1, and 10-752, Annotated Code of Maryland.

#### Regulation .07 Responsibilities of the Comptroller.

*COMAR 10.01.01.07*

On notification that an income tax credit certificate has been issued by the Department, the Comptroller shall transfer an amount equal to the income tax credit amount stated in the income tax credit certificate from the Nurse Practitioner Preceptorship Tax Credit Fund, the Physician Assistant Preceptorship Tax Credit Fund, or Licensed Practical Nurse and Registered Nurse Preceptorship Tax Credit Fund, to the General Fund.

#### Regulation .08 Expiration of Program.

*COMAR 10.01.01.08*

A. The Department shall issue final income tax credits based on available funds.

B. This chapter remains in effect until:

  (1) The date that funding for income tax credits ceases to be available; or

  (2) Sunset on June 30, 2030.