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Tax Treatment for HHS Funds

Tiffany Karlin

November 03, 2020

The Department of Health and Human Services (HHS) and Internal Revenue Service (IRS) have both clarified that payments received by for-profit providers from the HHS Provider Relief Fund shall be treated as taxable income.

The payment from the Provider Relief Fund is included in gross income under section 61 of the IRS Code. Tax-exempt providers are exempt from taxation on the Provider Relief Fund payments unless the payment reimburses the provider for expenses or lost revenue attributable to an unrelated trade or business as defined in section 513 of the IRS Code.

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