Rural Medical Practice Incentive Act

Rural Medical Practice Incentive Act - Sets forth the Congressional finding that incentives are needed to encourage the practice of medicine in health manpower shortage areas.

Permits the following groups of persons to fulfill active duty obligations in the National Health Service Corp by agreeing to serve in an area designated as a health manpower shortage area by the Secretary of Health, Education, and Welfare: (1) any doctor or dentist holding a reserve commission and granted a delay in service entry; (2) graduates of the Uniformed Services University of Health Sciences; and (3) any recipient under the Armed Forces health professional scholarship program. (Amends 10 U.S.C. 2115, 2123)

Grants a tax exclusion under the Internal Revenue Code in the following amounts to physicians, dentists, and optometrists establishing their practice in designated health manpower shortage areas: (1) $20,000 during the first taxable year of such practice (provided the practice is continuous for at least two years); (2) $15,000 during the second taxable year; (3) $10,000 during the third taxable year; (4) $7,500 during the fourth taxable year; and (5) $5,000 during the fifth taxable year.

Sets forth rules and regulations governing this tax exclusion. (Amends 26 U.S.C. 124)