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Loan provides tax benefits, addresses veterinary shortages

In most places, veterinarians and other animal service providers are critical to both two-legged and four-legged members of the community. This is especially true in matters of food animal service in certain areas of high priority. Many shortages of veterinarians can be blamed on the high cost of finishing medical training, now estimated at more than $150,000.

The US Department of Agriculture has initiated a special program to help alleviate identified shortages of animal health care in certain areas. This is the Veterinary Medicine Loan Repayment Program.

The program is sponsored by the National Veterinary Medical Science Act of 2003, and regulated by the National Institute of Food and Agriculture. It benefits veterinary students with repayment of student loans in those areas of most critical need. Applicants in return only need to promise to practice veterinary services at a designated special place, and they can receive up to $25,000 student loan debt repayment for the year.

The program benefits are exclusively limited to payments of principal and interest on federal or commercial loans provided to those attending an accredited school by the American Veterinary Medical Association that produces a degreed doctor, veterinarian or the equivalent.

The IRS considers loan repayments taxable so a provision of the award includes a federal tax reduction equal to 39 percent of the loan payment. This is paid directly to the recipient’s IRS account, which helps to defray the income tax liability increase.

In 2013, the state of Minnesota sent six nominations representing its veterinarian shortages. Five of these were approved by the USDA, and three of the nominations went to program applicants. Two awards were approved for full-time animal service veterinarians in southwestern and east Minnesota, and one was approved for a veterinary pathology group in a diagnostic lab.

The program is considered a success as it addressed local need to treat farm animals, as well as provide financial assistance to those veterinary students struggling with student loans in reducing their federal tax liability. In these and other tax matters, you are urged to seek information from an informed individual, who can understand the interpretation and application of the law regarding income, taxes and dedications in state and federal law.

Source: wctrib.com, “Three Minn. nominees recently accepted for USDA?veterinary loan repayment” Wes Nelson, Nov. 30, 2013

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