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Wednesday, November 17, 2010

FAQs about the EHR incentive program: tax consequences

Q: Will the EHR incentive payments be taxable?

A: Yes, the IRS will view all payments that you receive under the health IT incentive programs -- as much as $44,000 from Medicare or $63,750 from Medicaid -- as taxable income.

You may be able to write off a portion of the hardware or software purchase costs associated with your EHR, but there are limitations, so consult your tax adviser. Your tax adviser may also be aware of additional tax incentives unique to your state.

Got a question? E-mail us or post a comment below.

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About the Author

Steven Waldren, MD, is director and Jason Mitchell, MD, is assistant director of the AAFP's Center for Health Information Technology.

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Making Health IT Meaningful is a Family Practice Management (FPM) blog. However, the views expressed here are those of the individual authors. They do not necessarily reflect the opinion of FPM or the AAFP. The FPM blogs are not intended to provide medical, financial or legal advice. For more information see Terms of Use.