Bill Text: NJ S1412 | 2024-2025 | Regular Session | Introduced
Bill Title: Allows small employers to claim tax credit for paying certain health benefits plan premiums.
Spectrum: Partisan Bill (Democrat 2-0)
Status: (Introduced) 2024-01-09 - Introduced in the Senate, Referred to Senate Budget and Appropriations Committee [S1412 Detail]
Download: New_Jersey-2024-S1412-Introduced.html
STATE OF NEW JERSEY
221st LEGISLATURE
PRE-FILED FOR INTRODUCTION IN THE 2024 SESSION
Sponsored by:
Senator TROY SINGLETON
District 7 (Burlington)
SYNOPSIS
Allows small employers to claim tax credit for paying for certain health benefits plan premiums.
CURRENT VERSION OF TEXT
Introduced Pending Technical Review by Legislative Counsel.
An Act allowing taxpayers to claim a corporation business tax credit or gross income tax credit for certain health benefits plan premium expenses, supplementing P.L.1945, c.162 (C.54:10A-1 et seq.) and Title 54A of the New Jersey Statutes.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. a. A taxpayer with fewer than 20 employees that paid during the privilege period for employees' health benefits plan premiums for a health benefits plan that is at least as comprehensive as the essential health benefits required of plans subject to the essential health benefits requirements of the federal Affordable Care Act shall be allowed a credit against the tax imposed pursuant to section 5 of P.L.1945, c.162 (C.54:10A-5).
b. The credits allowed pursuant to this section shall be calculated as follows:
(1) if the taxpayer paid 100 percent of each premium so that no portion of the premium is left for the employee to pay, the taxpayer shall be allowed $250 for each employee with single coverage and $500 for each employee with family coverage;
(2) if the taxpayer paid at least 50 percent but less than 100 percent of each premium, the taxpayer shall be allowed a percentage of the amounts allowed in paragraph (1) equal to the percentage of the premium that the taxpayer paid; and
(3) if the taxpayer did not pay 50 percent or more of each premium, no credit shall be allowed for the premium paid for that employee.
c. The credit amount allowed pursuant to this section for each employee shall be reduced according to the percentage of the privilege period that the taxpayer paid for that employee's health benefits plan premiums.
d. The total credit allowed pursuant to this section shall not exceed the total amount paid during the privilege period for employees' health benefits plan premiums.
e. The director shall
prescribe the order of priority of the application of the credit allowed under
this section and any other credits allowed by law against the tax imposed under
section 5 of P.L.1945, c.162 (C.54:10A-5). The amount of the credit applied
under this section against the tax imposed pursuant to section 5 of P.L.1945,
c.162 (C.54:10A-5) for a privilege period, together with any other credits
allowed by law, shall not exceed 50 percent of the tax liability otherwise due
and shall not reduce the tax liability to an amount less than the statutory
minimum provided in subsection (e) of section 5 of P.L.1945, c.162
(C.54:10A-5). Any remaining credit shall not be carried forward to another
privilege period.
2. a. A taxpayer with fewer than 20 employees that paid during the taxable year for employees' health benefits plan premiums for a health benefits plan that is at least as comprehensive as the essential health benefits required of plans subject to the essential health benefits requirements of the federal Affordable Care Act shall be allowed a credit against the tax imposed pursuant to the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq.
b. The credits allowed pursuant to this section shall be calculated as follows:
(1) if the taxpayer paid 100 percent of each premium so that no portion of the premium is left for the employee to pay, the taxpayer shall be allowed $250 for each employee with single coverage and $500 for each employee with family coverage;
(2) if the taxpayer paid at least 50 percent but less than 100 percent of each premium, the taxpayer shall be allowed a percentage of the amounts allowed in paragraph (1) equal to the percentage of the premium that the taxpayer paid; and
(3) if the taxpayer did not pay 50 percent or more of each premium, no credit shall be allowed for the premium paid for that employee.
c. The credit amount allowed pursuant to this section for each employee shall be reduced according to the percentage of the taxable year that the taxpayer paid for that employee's health benefits plan premiums.
d. The total credit allowed pursuant to this section shall not exceed the total amount paid during the taxable year for employees' health benefits plan premiums.
e. (1) A business entity that is classified as a partnership for federal income tax purposes shall not be allowed a credit pursuant to this section directly, but the amount of credit of a taxpayer in respect of a distributive share of entity income, shall be determined by allocating to the taxpayer that proportion of the credit acquired by the entity that is equal to the taxpayer's share, whether or not distributed, of the total distributive income or gain of the entity for its taxable year ending within or with the taxpayer's taxable year.
(2) A New Jersey S Corporation shall not be allowed a credit pursuant to this section directly, but the amount of credit of a taxpayer in respect of a pro rata share of S Corporation income, shall be determined by allocating to the taxpayer that proportion of the credit acquired by the New Jersey S Corporation that is equal to the taxpayer's share, whether or not distributed, of the total pro rata share of S Corporation income of the New Jersey S Corporation for its privilege period ending within or with the taxpayer's taxable year.
f. The director shall prescribe the order of priority of the application of the credit allowed under this section and any other credits allowed by law against the tax imposed under the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq. The amount of the credit applied under this section against the tax imposed pursuant to the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., for a taxable year, together with any other credits allowed by law, shall not exceed 50 percent of the tax liability otherwise due. Any remaining credit shall not be carried forward to another taxable year.
3. This act shall take effect immediately and apply to privilege periods and taxable years beginning after enactment.
STATEMENT
This bill allows taxpayers with fewer than 20 employees to claim a tax credit if they pay for their employees' health benefits plan premiums for a health benefits plan that is at least as comprehensive as the essential health benefits requirements of the federal Affordable Care Act.
A taxpayer will be entitled to a credit up to $250 for each employee enrolled in a single plan and $500 for each employee enrolled in a family plan. The employer may only claim the full amount of the credit if the employer pays the full premiums. The bill provides a reduced credit if the employer pays at least half of the amount of the premium. The credit will also be reduced to account for employees that are not enrolled for the full taxable year.
