S.F. 248 Section 1. NEW SECTION . 422.12A Small employer health 1 insurance tax credit. 2 1. The taxes imposed under this division, less the credits 3 allowed under section 422.12, shall be reduced by a small 4 employer health insurance tax credit equal to twenty-five 5 percent of the federal small employer health insurance tax 6 credit provided in section 45R of the Internal Revenue Code. 7 The tax credit provided in this section is available to 8 eligible small employers. 9 2. Any credit in excess of the tax liability is refundable. 10 3. For purposes of this section, “eligible small employer” 11 means a taxpayer who has ten or fewer full-time employees and 12 who otherwise meets the requirements of the small employer 13 health insurance tax credit allowed under section 45R of the 14 Internal Revenue Code. 15 Sec. 2. Section 422.33, Code 2011, is amended by adding the 16 following new subsection: 17 NEW SUBSECTION . 13. The taxes imposed under this division 18 shall be reduced by a small employer health insurance tax 19 credit authorized pursuant to section 422.12A. 20 Sec. 3. RETROACTIVE APPLICABILITY. This Act applies 21 retroactively to January 1, 2011, for tax years beginning on 22 or after that date. 23 EXPLANATION 24 The federal Patient Protection and Affordable Care Act (Pub. 25 L. No. 111-148) provided for a small employer health insurance 26 income tax credit of up to 50 percent for eligible small 27 employers. This bill provides for a credit against Iowa income 28 tax liability in an amount equal to 25 percent of the federal 29 credit for employers with 10 or fewer full-time employees. 30 The tax credit is refundable and is available against the 31 individual and corporate income taxes. 32 The bill applies retroactively to January 1, 2011, for tax 33 years beginning on or after that date. 34 -1- LSB 1899XS (3) 84 tw/sc 1/ 1