A health care provider that receives a payment from the Provider Relief Fund may not exclude this payment from gross income as a qualified disaster relief payment under section 139 of the Internal Revenue Code (Code).
Section 139(a) of the Code excludes from gross income any amount received by an individual as a qualified disaster relief payment. Section 139(b) defines a "qualified disaster relief payment" as any amount paid to or for the benefit of an individual to reimburse or pay reasonable and necessary personal, family, living, or funeral expenses incurred as a result of a qualified disaster, or to reimburse or pay reasonable and necessary expenses incurred for the repair or rehabilitation of a personal residence or its contents due to a qualified disaster. Additionally, it includes payments by a federal, state, or local government to promote the general welfare in connection with a qualified disaster, provided the expenses are not otherwise compensated by insurance or other means.
However, the retrieved information from Rev. Rul. 2005-46 clarifies that grants received by businesses under state programs for property loss from a disaster are not excludable from gross income under the general welfare exclusion, as a gift, as a qualified disaster relief payment, or as a contribution to capital. This ruling indicates that payments to businesses, including health care providers, do not fall under the exclusions provided in section 139.
Furthermore, the retrieved information does not provide any specific provision or ruling that would allow a health care provider to exclude payments from the Provider Relief Fund from gross income under section 139. The general principle under section 61(a) is that gross income includes all income from whatever source derived, except as otherwise provided by law. Since there is no specific exclusion applicable to health care providers receiving payments from the Provider Relief Fund under section 139, these payments must be included in gross income.
Sources:
Rev. Rul. 2005-46
§ 139. Disaster relief payments
Rev. Rul. 2003-12
Rev. Rul. 98-19
Rev. Proc. 2020-30
Rev. Rul. 2003-115
Rev. Rul. 76-144
