1. Short title
This Act may be cited as the “Small Business Tax Credit Accessibility Act”.
Small Business Tax Credit Accessibility Act
A BILL
To amend the Internal Revenue Code of 1986 to expand and modify the credit for employee health insurance expenses of small employers.
2. Sense of the Congress
It is the sense of the Congress that the Obama administration should work to make the small business health care tax credit under section 45R of the Internal Revenue Code of 1986 more accessible for small employers.
3. Expansion and modification of credit for employee health insurance expenses of small employers
Expansion of definition of eligible small employer— Subparagraph (A) of section 45R(d)(1) of the Internal Revenue Code of 1986 is amended by striking “25” and inserting “50”.
Amendment to phaseout determination— Subsection (c) of section 45R of the Internal Revenue Code of 1986 is amended to read as follows:
“(c) Phaseout of credit amount based on number of employees and average wages—The amount of the credit determined under subsection (b) (without regard to this subsection) shall be adjusted (but not below zero) by multiplying such amount by the product of—
“(1) the lesser of—
“(A) a fraction the numerator of which is the excess (if any) of 50 over the total number of full-time equivalent employees of the employer and the denominator of which is 30, and
“(B) 1, and
“(2) the lesser of—
“(A) a fraction the numerator of which is the excess (if any) of—
“(i) the dollar amount in effect under subsection (d)(3)(B) for the taxable year, multiplied by 2, over
“(ii) the average annual wages of the employer for such taxable year, and
“(B) 1.”
Partially phased out credit allowed for insurance outside an Exchange—
In general— Section 45R of the Internal Revenue Code of 1986 is amended by redesignating subsections (h) and (i) as subsections (i) and (j), respectively, and by inserting after subsection (g) the following new subsection:
“(h) Partially phased out credit allowed for insurance outside an Exchange for 2014
“(1) In general—If an eligible small employer offers to its employees in a manner other than through an Exchange a health plan that meets the requirements of paragraph (2), the following modifications shall apply with respect to a taxable year beginning in 2014:
“(A) Qualified health plan—This section and section 280C(h) shall be applied for such taxable year by treating such plan as a qualified health plan.
“(B) Reduced credit percentage—Subsection (b) shall be applied—
“(i) by substituting “25 percent” for “35 percent”,
“(ii) by substituting “35 percent” for “50 percent”, and
“(iii) without regard to “through an Exchange” in paragraph (1) thereof.
“(C) Contribution arrangements—Subsection (d)(4) shall be applied without regard to “through an exchange”.
“(D) Credit period
“(i) In general—The credit under this section shall be determined without regard to whether such taxable year is in a credit period.
“(ii) Year taken into account as portion of credit period in subsequent years—For purposes of applying this section to taxable years beginning after 2014 in which the employer offers a qualified health plan (without regard to subparagraph (A)) to its employees through an Exchange, subsection (e)(2) shall be applied by substituting “2-consecutive-taxable” for “3-consecutive-taxable”.
“(2) Requirements—A health plan meets the requirements of this paragraph if such plan—
“(A) provides the essential health benefits package described in section 1302(a) of the Patient Protection and Affordable Care Act, and
“(B) is offered by a health insurance issuer that—
“(i) is licensed and in good standing to offer health insurance coverage in each State in which such issuer offers health insurance coverage, and
“(ii) if such issuer offers health plans through an Exchange, agrees to charge the same premium rate for each qualified health plan of the issuer without regard to whether the plan is offered through an Exchange or whether the plan is offered directly from the issuer or through an agent.”
Conforming amendment— Section 6055(b)(2)(C) of such Code is amended by striking “Exchange” and inserting “Exchange (or a plan with respect to which a credit is allowed under section 45R by reason of subsection (h) thereof)”.
Extension of credit period— Paragraph (2) of section 45R(e) of the Internal Revenue Code of 1986 is amended by striking “2-consecutive-taxable” and inserting “3-consecutive-taxable”.
Average annual wage limitation— Subparagraph (B) of section 45R(d)(3) of the Internal Revenue Code of 1986 is amended to read as follows:
“(B) Dollar amount—For purposes of paragraph (1)(B) and subsection (c)(2), the dollar amount in effect under this paragraph is the amount equal to 110 percent of the poverty line (within the meaning of section 36B(d)(3)) for a family of 4.”
Elimination of uniform percentage contribution requirement— Paragraph (4) of section 45R(d) of the Internal Revenue Code of 1986 is amended by striking “a uniform percentage (not less than 50 percent)” and inserting “at least 50 percent”.
Elimination of cap relating to average local premiums— Subsection (b) of section 45R of the Internal Revenue Code of 1986 is amended by striking “the lesser of” and all that follows and inserting “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.”.
Credit availability for family members in certain cases— Clause (iv) of section 45R(e)(1)(A) of the Internal Revenue Code of 1986 is amended to read as follows:
“(iv) any individual who is a spouse or dependent (within the meaning of section 152) of an individual described in clause (i), (ii), or (iii).”
Effective date— The amendments made by this section shall apply to amounts paid or incurred in taxable years beginning after December 31, 2013.