SENATE FILE 248

BY  SODDERS

A BILL FOR

An Act providing for a small employer health insurance tax credit as a percentage of the federal credit and including retroactive applicability provisions.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

   Section 1.  NEW SECTION.  422.12A  Small employer health insurance tax credit.
   1.  The taxes imposed under this division, less the credits allowed under section 422.12, shall be reduced by a small employer health insurance tax credit equal to twenty-five percent of the federal small employer health insurance tax credit provided in section 45R of the Internal Revenue Code. The tax credit provided in this section is available to eligible small employers.
   2.  Any credit in excess of the tax liability is refundable.
   3.  For purposes of this section,“eligible small employer”means a taxpayer who has ten or fewer full-time employees and who otherwise meets the requirements of the small employer health insurance tax credit allowed under section 45R of the Internal Revenue Code.
   Sec. 2.  Section 422.33, Code 2011, is amended by adding the following new subsection:
   NEW SUBSECTION.  13.  The taxes imposed under this division shall be reduced by a small employer health insurance tax credit authorized pursuant to section 422.12A.
   Sec. 3.  RETROACTIVE APPLICABILITY.  This Act applies retroactively to January 1, 2011, for tax years beginning on or after that date.
EXPLANATION
   The federal Patient Protection and Affordable Care Act (Pub. L. No. 111-148) provided for a small employer health insurance income tax credit of up to 50 percent for eligible small employers. This bill provides for a credit against Iowa income tax liability in an amount equal to 25 percent of the federal credit for employers with 10 or fewer full-time employees. The tax credit is refundable and is available against the individual and corporate income taxes.
   The bill applies retroactively to January 1, 2011, for tax years beginning on or after that date.