summary
Introduced
01/13/2026
01/13/2026
In Committee
01/13/2026
01/13/2026
Crossed Over
Passed
Dead
Introduced Session
2026-2027 Regular Session
Bill Summary
This bill excludes from gross income taxation certain Medicaid income that would otherwise be taxable in order to incentivize physicians and medical practices to treat Medicaid patients. Taxpayer physicians and medical practices in the State that are organized as limited liability companies or partnerships benefit from this exclusion. The amount of the exclusion is equal to that proportion of net income from the provision of medical services to Medicaid patients in the State that the total Medicaid receipts of that practice for the taxable year bear to the total amount received for medical services at that practice for the taxable year. The manner in which the amount of the exclusion is derived provides an incentive for physicians and practices to increase the numbers of Medicaid patients in their practices. Increased numbers of newly Medicaid-eligible and insured patients, resulting from the implementation of the federal Affordable Care Act, are in need of physicians for their health care needs. Accordingly, this bill acts to incentivize physicians and practices to treat Medicaid recipients by making what would otherwise be the taxable portion of Medicaid income, free of income taxation by the State.
AI Summary
This bill amends New Jersey law to exclude certain income received from the Medicaid program from state gross income tax for physicians and medical practices. Specifically, it allows for a tax exclusion on a portion of net income derived from treating Medicaid patients, calculated based on the proportion of total receipts that come from Medicaid. This aims to encourage healthcare providers to accept more Medicaid patients, particularly in light of increased Medicaid eligibility due to the federal Affordable Care Act. The exclusion applies to medical practices in New Jersey where licensed physicians provide services, make diagnoses, and communicate with patients and other providers for Medicaid recipients, and "qualified Medicaid receipts" include payments from the Medicaid program itself and from managed care organizations contracted with Medicaid.
Committee Categories
Business and Industry
Sponsors (2)
Last Action
Introduced, Referred to Assembly Commerce and Economic Development Committee (on 01/13/2026)
Official Document
bill text
bill summary
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bill summary
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bill summary
| Document Type | Source Location |
|---|---|
| State Bill Page | https://www.njleg.state.nj.us/bill-search/2026/A3155 |
| BillText | https://pub.njleg.gov/Bills/2026/A3500/3155_I1.HTM |
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