House File 267 - Introduced
HOUSE FILE
BY HUSER and PETERSEN
Passed House, Date Passed Senate, Date
Vote: Ayes Nays Vote: Ayes Nays
Approved
A BILL FOR
1 An Act providing for income tax credits for the cost of adding
2 mental health coverage to group insurance policies of small
3 businesses and providing effective and retroactive
4 applicability date provisions.
5 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
6 TLSB 1364HH 81
7 mg/sh/8
PAG LIN
1 1 Section 1. NEW SECTION. 422.11K MENTAL HEALTH COVERAGE
1 2 TAX CREDIT.
1 3 1. The taxes imposed under this division, less the credits
1 4 allowed under sections 422.12 and 422.12B, shall be reduced by
1 5 a mental health coverage tax credit. The tax credit may be
1 6 claimed by a small business, as defined in section 15.102,
1 7 that adds mental health coverage to its group health insurance
1 8 policy or that includes mental health coverage in its group
1 9 health insurance policy when the business first provides group
1 10 health insurance coverage. The amount of the tax credit
1 11 equals fifty percent of the additional cost to the small
1 12 business to add or have included mental health coverage as
1 13 part of its group health insurance policy.
1 14 2. a. A small business is entitled to the mental health
1 15 coverage tax credit for only one tax year. However, any
1 16 credit in excess of the tax liability for the tax year is
1 17 nonrefundable but may be credited to the tax liability for the
1 18 following seven years or until depleted, whichever is the
1 19 earlier.
1 20 b. If a small business that has claimed the mental health
1 21 coverage tax credit is merged with another business or is
1 22 divided into separate businesses, any resulting business,
1 23 which is at least fifteen percent directly or indirectly owned
1 24 or controlled by the owners or controllers of the original
1 25 small business, is not entitled to the mental health coverage
1 26 tax credit.
1 27 3. An individual may claim a mental health coverage tax
1 28 credit allowed a partnership, limited liability company, S
1 29 corporation, estate, or trust electing to have the income
1 30 taxed directly to the individual. The amount claimed by the
1 31 individual shall be based upon the pro rata share of the
1 32 individual's earnings of the partnership, limited liability
1 33 company, S corporation, estate, or trust.
1 34 Sec. 2. Section 422.33, Code 2005, is amended by adding
1 35 the following new subsection:
2 1 NEW SUBSECTION. 17. a. The taxes imposed under this
2 2 division shall be reduced by a mental health coverage tax
2 3 credit. The tax credit may be claimed by a small business, as
2 4 defined in section 15.102, that adds mental health coverage to
2 5 its group health insurance policy or that includes mental
2 6 health coverage in its group health insurance policy when the
2 7 business first provides group health insurance coverage. The
2 8 amount of the tax credit equals fifty percent of the
2 9 additional cost to the small business to add or have included
2 10 mental health coverage as part of its group health insurance
2 11 policy.
2 12 b. (1) A small business is entitled to the mental health
2 13 coverage tax credit for only one tax year. However, any
2 14 credit in excess of the tax liability for the tax year is
2 15 nonrefundable but may be credited to the tax liability for the
2 16 following seven years or until depleted, whichever is the
2 17 earlier.
2 18 (2) If a small business that has claimed the mental health
2 19 coverage tax credit is merged with another business or is
2 20 divided into separate businesses, any resulting business,
2 21 which is at least fifteen percent directly or indirectly owned
2 22 or controlled by the owners or controllers of the original
2 23 small business, is not entitled to the mental health coverage
2 24 tax credit.
2 25 Sec. 3. EFFECTIVE AND RETROACTIVE APPLICABILITY DATES.
2 26 This Act, being deemed of immediate importance, takes effect
2 27 upon enactment and applies retroactively to January 1, 2005,
2 28 for tax years beginning on or after that date.
2 29 EXPLANATION
2 30 This bill provides an individual and corporate income tax
2 31 credit for a small business that adds mental health coverage
2 32 to its group health insurance policy or that included mental
2 33 health coverage in its group health insurance policy when it
2 34 first offered group health insurance coverage. A small
2 35 business is a for=profit enterprise that consists of either
3 1 fewer than 20 employees or has an annual gross income of less
3 2 than $3 million averaged over the previous three fiscal years.
3 3 The amount of the credit equals 50 percent of the
3 4 additional cost to the small business to add or to have
3 5 included mental health coverage as part of its group health
3 6 insurance policy.
3 7 The bill takes effect upon enactment and applies
3 8 retroactively to January 1, 2005, for tax years beginning on
3 9 or after that date.
3 10 LSB 1364HH 81
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