Insight

COVID-19: Telemedicine and tax

As telemedicine accelerates, the need for greater tax clarity and updated guidance relating to virtual healthcare is evident.

Robert Delgado

Robert Delgado

Principal, Compensation & Benefits, Washington National Tax, KPMG US

+1 858-750-7133

Lori Robbins

Lori Robbins

Managing Director, National Healthcare Tax Deputy, Washington National Tax, KPMG LLP

+1 202-533-3491

John B. Harper

John B. Harper

Director, State and Local Tax, Washington National Tax, KPMG LLP

+1 615-744-2170

Preston Quesenberry

Preston Quesenberry

Managing Director, Exempt Organizations Group, Washington National Tax, KPMG LLP

+1 202-533-3985

Justin C. Stringfield

Justin C. Stringfield

Managing Director, State and Local Tax, KPMG LLP

615-248-5510

COVID-19 served as an unexpected catalyst driving newfound popularity of virtual healthcare. Recent changes to regulatory and reimbursement rules for telemedicine further boosted its appeal as a safe healthcare option.

Despite being around for decades, telemedicine’s accelerated acceptance thrust the need for greater clarity on tax guidance into the spotlight. Existing guidance does not delve into the digital world leaving much up to interpretation, such as:

  • What defines the doctor and patient relationship in the virtual world?
  • What federal income tax issues apply to both taxable and tax-exempt healthcare providers who employ telemedicine?
  • When the use of telemedicine crosses state lines, what are the state and local tax consequences?
  • What tax issues arise with health plan accounts, R&D tax accounts, and international tax implications?

This paper examines various tax considerations relating to telemedicine and explores several hypothetical scenarios providing possible interpretations of tax outcomes.


 

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