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Committee lays over bill to extend tax exclusion for student loan assistance at critical-access dental clinics
Summary
Senate File 2293 would allow critical-access dental clinics to provide up to $5,250 per year in student loan educational assistance that would remain excludable from income under federal IRS §127 treatment; the committee laid the bill over after testimony from clinic operators.
Senate File 2293 was presented March 18 to the Senate Taxes Committee to preserve the tax treatment of student loan repayment or educational assistance provided by critical-access dental clinics. Senator Weber, the sponsor, said the bill would allow clinics to continue reducing employees’ taxable income with up to $5,250 in student loan educational assistance per year, a treatment rooted in Internal Revenue Code §127.
Senator Weber told the committee that maintaining rural dental clinics is difficult because reimbursement rates for publicly insured patients are low, and the student loan assistance exemption is a recruitment and retention tool for clinics serving underserved areas. John Cornelius, executive director of Caring Hands Dental Clinic, told the panel his organization operates two clinics (Alexandria and Pipestone) and said the clinics serve many underserved ZIP codes; he said the assistance helps attract and retain providers and staff.
Committee members discussed the revenue estimate and whether the federal exclusion is renewed; staff and witnesses indicated work is ongoing to ensure continuity if a federal expiration occurs. Senator Weber said the fiscal analysis shows negligible state revenue impact under current treatment because similar amounts have not historically been collected.
The committee laid Senate File 2293 over for further consideration; no roll-call vote on final passage was recorded.
