Report Title:
Health Care Coverage; Tax Credit; Part-Time Employees
Description:
Provides a tax credit to employers who provide health care coverage for their part-time employees at the lesser of 50% of premiums paid or $ per part-time employee. Applies to taxable years beginning after 12/31/2005. (SD1)
|
THE SENATE |
S.B. NO. |
1237 |
|
TWENTY-THIRD LEGISLATURE, 2005 |
S.D. 1 |
|
|
STATE OF HAWAII |
||
|
|
A BILL FOR AN ACT
relating to health care insurance tax credit.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. Hawaii's prepaid health care law does not require employers to provide health care coverage for their part-time employees. As a result, many workers who are not regular or full-time employees in one job but instead work a combined twenty hours or more at two or more part-time jobs are left without health care coverage.
The purpose of this Act is to offer a tax credit as an incentive to employers in Hawaii to provide such health care coverage for their part-time 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- Part-time employee health care coverage premium tax credit. (a) Each individual or corporate resident taxpayer subject to the tax imposed by this chapter who employs a part-time employee, as defined in this section, for which health care coverage is not required, and files an individual or corporate net income tax return for a taxable year, regardless of adjusted gross income, may claim a part-time employee health care coverage premium tax credit against the taxpayer's individual or corporate net income tax liability for the taxable year in which the credit is claimed and for which the income tax return is being filed; provided that an individual or corporation who has no income taxable under this chapter may claim this credit.
(b) The tax credit, when claimed by:
(1) Either the individual resident taxpayer or by a husband and wife filing a joint return; provided that a resident husband and wife filing separate tax returns for a taxable year for which a joint return could have been filed shall claim only the tax credit to which they would have been entitled under this section had a joint return been filed; or
(2) A corporation, partnership, limited liability company, or other form of business entity,
shall be claimed only once in the taxable year, regardless of the number of taxpayers under paragraph (1) or the number of partners or corporate officers under paragraph (2).
(c) The amount of the tax credit shall be an amount equal to the lesser of:
(1) $ for each employee; or
(2) Fifty per cent of any health care coverage insurance premium payments made for each part-time employee,
for the taxable year in which the payments were made.
(d) If the tax credit exceeds the taxpayer's income tax liability, the excess of credit over liability may be used as a credit against the taxpayer's income tax liability in subsequent years until exhausted.
(e) All claims, including any amended claims, for tax credits under this section shall be filed on or before the end of the twelfth month following the close of the taxable year for which the credit may be claimed. Failure to comply with the foregoing provision shall constitute a waiver of the right to claim the credit.
(f) The director of taxation shall prepare any forms that may be necessary to claim the credit under this section. The director may also require the taxpayer to furnish information to ascertain the validity of the claims for credits made under this section and may adopt rules necessary to effectuate the purposes of this section pursuant to chapter 91.
(g) For the purposes of this section:
"Health care coverage" means the health care coverage that is required to be provided by employers to regular employees under chapter 393.
"Part-time employee" means an employee who is not a regular employee, as defined in section 393-3, and who is employed by any one employer in this state for less than twenty hours per week, including persons employed in seasonal employment, as defined in section 393-3."
SECTION 3. New statutory material is underscored.
SECTION 4. This Act, upon its approval, shall apply to taxable years beginning after December 31, 2005.