1. Short title
This Act may be cited as the “Small Business Health Care Tax Credit Improvement Act of 2013”.
Small Business Health Care Tax Credit Improvement Act of 2013
A BILL
To amend the Internal Revenue Code of 1986 to expand and simplify the credit for employee health insurance expenses of small employers.
2. Expansion and simplification of credit for employee health insurance expenses of small employers
Increase in maximum number of eligible full-Time employees— Subparagraph (A) of section 45R(d)(1) of the Internal Revenue Code of 1986 is amended by striking “25 full-time equivalent employees” and inserting “50 full-time equivalent employees”.
Modification of phaseout of credit amount—
In general— Subsection (c) of section 45R of such Code is amended to read as follows:
“(c) Phaseout of credit amount based on number of employees and average wages
“(1) In general—The amount of the credit determined under subsection (b) shall be adjusted by multiplying—
“(A) the amount determined under subsection (b), by
“(B) the product of the amount determined under paragraph (2) and the amount determined under paragraph (3).
“(2) Employee adjustment—The amount determined under this paragraph is a fraction (not more than 1) the numerator of which is the number by which the total number of full-time equivalent employees of the eligible employer is less than 50 and the denominator of which is 30.
“(3) Wages adjustment—The amount determined under this paragraph is a fraction (not more than 1) the numerator of which is the amount by which the average annual wages of the eligible employer is less than twice the dollar amount in effect under subsection (d)(3)(B) and the denominator of which is such dollar amount.”
Conforming amendments—
Subsection (a) of section 45R of such Code is amended by inserting “, as adjusted under subsection (c)” after “the amount determined under subsection (b)”.
Subsection (b) of section 45R of such Code is amended by striking “Subject to subsection (c), the” and inserting “The”.
Subparagraph (B) of section 45R(d)(3) of such Code is amended by striking “subsection (c)(2)” and inserting “subsection (c)(3)”.
Average annual wage limitation increase—
2012 and 2013— Clause (i) of section 45R(d)(3)(B) of such Code is amended to read as follows:
“(i) 2010, 2011, 2012, and 2013—The dollar amount in effect under this paragraph is—
“(I) for taxable years beginning in 2010, 2011, or 2012, $25,000, and
“(II) for taxable years beginning in 2013, $28,500.”
Subsequent years— Clause (ii) of section 45R(d)(3)(B) of such Code is amended by striking “$25,000” and inserting “$28,500”.
Repeal of uniformity requirement for contributions— Paragraph (4) of section 45R(d) of such Code is amended—
by striking “in an amount equal to a uniform percentage (not less than 50 percent) of the premium cost of the qualified health plan”, and
by inserting “(in an amount not less than 50 percent of the premium cost of the qualified health plan)” after “nonelective contribution”.
Repeal of limitation based on state average premiums—
In general— Subsection (b) of section 45R of such Code is amended to read as follows:
“(b) Health insurance credit amount—Subject to subsection (c), the amount determined under this subsection with respect to any eligible small employer is equal to 50 percent (35 percent in the case of a tax-exempt eligible small employer) of the aggregate amount of nonelective contributions the employer made on behalf of its employees during the taxable year under the arrangement described in subsection (d)(4) for premiums for qualified health plans offered by the employer to its employees through an Exchange.”
Conforming amendment— Paragraph (2) of section 45R(g) of such Code is amended by inserting “and” at the end of subparagraph (A), by striking “, and” at the end of subparagraph (B) and inserting a period, and by striking subparagraph (C).
Effective date— The amendments made by this section shall apply to taxable years beginning after December 31, 2012.