The table, state by state
Start with what each state actually pays an advanced practice nurse. These are the figures in current statute, and every one of them carries conditions that matter more than the dollar amount does. Maryland allows $1,000 for each rotation, up to $10,000 in a year, and only where the precepting is uncompensated and the site sits in a designated shortage area. Hawaii allows $1,000 per rotation with a $5,000 ceiling, and its credit is shared with physicians and pharmacists.
Alabama pays $425 for every 160 hours of precepting and stops at $5,100, with nurse practitioners, nurse midwives, nurse anesthetists and physician assistants all named. Georgia sets $375 apiece for rotations one through three and $750 apiece for rotations four through ten, holds APRNs and PAs to $6,375, and is scheduled to sunset at the end of 2026 unless the legislature extends it. Colorado pays $2,000 for a qualifying rural preceptorship and allows as many as three in one year.
- Maryland: $1,000 for each rotation, $10,000 annual cap, uncompensated precepting in a shortage area only.
- Alabama: $425 for each 160-hour rotation, $5,100 annual cap, open to NPs, CNMs, CRNAs and PAs.
- Georgia: $375 for rotations one to three, $750 for rotations four to ten, $6,375 cap for APRNs and PAs, scheduled to sunset 31 Dec 2026.
- Hawaii: $1,000 for each rotation, $5,000 annual cap, shared with physicians and pharmacists.
- Colorado: $2,000 for a qualifying rural preceptorship, no more than three in a tax year.
- South Carolina: two or more rotations required, at a practice where at least 30 percent of patients are Medicaid, Medicare or self-pay.
Why several of them require unpaid teaching
The legislatures that wrote these credits were trying to buy something money was not already buying: teaching in places where nobody is paid to teach. So the statutes often say the precepting has to be uncompensated. Maryland says it plainly. Others say nothing about it, and silence is not the same as permission. If you accept a fee for a rotation and then claim a credit that assumes the rotation was free, that is a problem your preparer will find in April.
It is a real fork if you want both. One way through is to separate them by student: take a fee for one rotation and precept the next one unpaid in a qualifying county, where the state's rules allow the split. Another way is to skip the credit and take the fee, which for most preceptors is the larger figure anyway. What you cannot do is assume the two stack because no line on the form says otherwise.
A credit is not a deduction
The two words get used as if they were interchangeable. A deduction reduces the income your state taxes, so its value depends on your rate: deduct $1,000 at a 5 percent rate and you keep $50. A credit reduces the tax itself. A $1,000 credit against a $1,400 state bill leaves you owing $400. That arithmetic is why a $425 preceptor credit is worth more than a $425 write-off, and why the small figures on this page are less small than they look.
The next question is what happens when the credit is bigger than what you owe. Some states carry the unused part forward to a later year, some let it lapse, and some pay it out. That line lives in the state's filing instructions rather than in the headline figure, and it decides whether Colorado's $2,000 is worth $2,000 to you or worth only as much as your state liability that spring. Read it before you plan around the money.
The federal bill that has not passed
You will see the PRECEPT Nurses Act quoted as though it were already law. It is not. The bill proposes a $2,000 federal credit for nurses who precept without compensation, it has been introduced, and it has not been enacted. Bills die far more often than they pass. Until this one moves, there is no federal preceptor credit on any return, and any page that treats one as available is describing a proposal in the present tense.
It is still worth knowing for one reason. The condition attached to the proposal is the same condition the states use, which is that the teaching be unpaid. A preceptor who is paid per block would sit outside it. That is not an argument for working free. It is a reason to notice that so far the tax code has chosen to reward the unpaid version of this work and has left the paid version alone.
What to keep, and who to ask
Each of these credits is a documentation claim, and the documentation is thin: the opening and closing dates of the rotation, the hours the student spent with you, the student's name and school, the address of the site, and a letter from the nursing program confirming that you served as preceptor. Ask the placement office for that letter during the final week, while your name is still in front of somebody. Four months later the same request takes three emails.
Then confirm the current figures before you file. Caps change, professions get added, and credits expire, which is exactly what Georgia's is scheduled to do after 2026. Your preparer can tell you what your state allows this year, whether a fee disqualifies the rotation, and which form the credit lands on. If you are still deciding whether the credit or the fee is the better route for you, the wider market answer is on what preceptors actually get paid.
If your state's credit needs unpaid hours and you would rather be paid for them, <a href="/apply/">open your hours</a> and set your own rate.
Apply to preceptQuestions
Which states give nurse practitioners a preceptor tax credit?
Six of them: Maryland, Alabama, Georgia, Hawaii, Colorado and South Carolina. The amounts range from $375 for a first Georgia rotation to $2,000 for a rural Colorado preceptorship. Each state sets its own annual cap, its own definition of a qualifying rotation, and its own list of eligible professions. Confirm this year's rules with your preparer before you file.
Can I claim a preceptor tax credit if I was paid for the rotation?
Often no. Some of these credits, Maryland's being the clearest, exist specifically to reward teaching that nobody paid for, so a fee can disqualify the rotation entirely. Other states are silent, and silence is not approval. Have your preparer read your state's statute, and document paid and unpaid rotations separately so you can claim whichever one qualifies.
Is the PRECEPT Nurses Act law yet?
No. It is a proposed federal credit of $2,000 for nurses who precept students without compensation. The bill has been introduced in Congress and has not been enacted, so there is nothing to claim on a federal return today. Check the bill's status yourself rather than trusting an article that describes the credit as though it already exists.
How is a tax credit different from a deduction?
A deduction reduces the income that gets taxed, so what it saves you depends on your rate. A credit reduces the tax you owe, close to dollar for dollar. So a $425 preceptor credit takes roughly $425 off a state bill, while a $425 deduction saves you only the tax on that amount. Carry-forward rules differ by state.
What records do I need to claim a preceptor credit?
Keep the rotation dates, the total student hours, the student's name and program, and the clinic address. Add a letter from the nursing school confirming that you precepted that student, which states either require or accept as proof. Request it in the final week of the rotation. Some states also want the shortage-area or county designation for your site.
Sources: Georgia Department of Revenue: Community Based Faculty Preceptor Tax Credit · Alabama AHEC: Alabama Preceptor Tax Incentive Program · Augusta University AHEC: Preceptor Tax Incentive Program
Dagny H., EA
An enrolled agent. Pays the two halves of every block, issues the 1099-NEC each January, and keeps the state tax-credit table current. Will not compute your liability; will tell you what to ask your preparer.
