SB2391

Report Title:

Income Tax Credit; Employee's Health Insurance

 

Description:

Establishes a temporary income tax credit for a taxpayer who pays one hundred per cent of the cost of the taxpayer's employee's health insurance premiums.

THE SENATE	S.B. NO.	2391
TWENTY-FIRST LEGISLATURE, 2002
STATE OF HAWAII

A BILL FOR AN ACT

 

relating to taxation.

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

SECTION 1. Businesses across the State have suffered from the economic downturn following the September, 2001, terrorist attacks on the United States. With a decline in business activity and a corresponding loss of income, employers are struggling to meet the costs of doing business. Despite these difficult economic times, some employers continue to cover the total cost of health insurance coverage for their employees. Immediate tax relief is required for these employers to continue doing business and contributing to the employment of the State's labor force.

The purpose of this measure is to establish a temporary income tax credit for taxpayers who pay one hundred per cent of the health care premiums for their employees.

SECTION 2. Chapter 235, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§235-   Employee's health care insurance tax credit. (a) Each individual or corporate taxpayer who:

(1) Files an income tax return for a taxable year;

(2) Is not claimed or is not otherwise eligible to be claimed as a dependent by another taxpayer for Hawaii state income tax purposes; and

(3) Pays one hundred per cent of the health insurance premium costs of an employee of the taxpayer

may claim a tax credit against the taxpayer's income tax liability for the taxable year for which the income tax return is being filed. The tax credit shall be in an amount equal to     per cent of the health insurance premium costs paid by the taxpayer during the taxable year for the employee's health insurance plan. The taxpayer may claim a tax credit as to each employee health plan for which the taxpayer has paid one hundred per cent of the health insurance premium costs; provided that the total amount of the tax credits shall not exceed $           in any taxable year. No claim for a tax credit shall be made under this section for any health insurance premium costs for an employee's health insurance plan deducted under section 213 of the Internal Revenue Code, operative under this chapter.

(b) If the tax credit claimed by the taxpayer under this section exceeds the amount of the income tax payments due from the taxpayer, the excess of credit over payments due shall be refunded to the taxpayer; provided that the tax credit properly claimed by a taxpayer who has no income tax liability shall be paid to the taxpayer; and provided that no refunds or payments on account of the tax credit allowed by this section shall be made for amounts less than $1.

(c) The director of taxation shall prepare any forms that may be necessary to claim a credit under this section, may require proof of the claim for the tax credit, and may adopt rules pursuant to chapter 91.

(d) All of the provisions relating to assessments and refunds under this chapter and under section 231-23(c)(1) shall apply to the tax credit under this section.

(e) Claims for the tax credit under this section, including any amended claims, shall be filed on or before the end of the twelfth month following the taxable year for which the credit may be claimed."

SECTION 3. New statutory material is underscored. SECTION 4. This Act, upon its approval, shall apply to the taxable years beginning after December 31, 2001, and ending on December 31,     .

INTRODUCED BY:	_____________________________