Bill Text: PA HB763 | 2009-2010 | Regular Session | Introduced

---

Bill Title: Providing for a long-term care tax credit.

Spectrum: Slight Partisan Bill (Republican 33-13)

Status: (Introduced - Dead) 2009-03-06 - Referred to FINANCE [HB763 Detail]

Download: Pennsylvania-2009-HB763-Introduced.html

---

PRINTER'S NO. 853
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No. 763 Session of2009
INTRODUCED BY PETRI, BAKER, BEAR, BEYER, BOYD, CALTAGIRONE, CLYMER, DENLINGER, DePASQUALE, EVERETT, FAIRCHILD, GEIST, GOODMAN, GRELL, GROVE, GRUCELA, HENNESSEY, HESS, HORNAMAN, HUTCHINSON, KAUFFMAN, KILLION, LONGIETTI, MARSHALL, MELIO, MILLARD, O'NEILL, PALLONE, PETRARCA, PHILLIPS, PICKETT, PYLE, RAPP, READSHAW, REICHLEY, SCAVELLO, SIPTROTH, STERN, SWANGER, TURZAI, VULAKOVICH, WALKO, WATSON AND YOUNGBLOOD, MARCH 6, 2009
REFERRED TO COMMITTEE ON FINANCE, MARCH 6, 2009
AN ACT
Amending the act of March 4, 1971 (P.L.6, No.2), entitled "An
act relating to tax reform and State taxation by codifying
and enumerating certain subjects of taxation and imposing
taxes thereon; providing procedures for the payment,
collection, administration and enforcement thereof; providing
for tax credits in certain cases; conferring powers and
imposing duties upon the Department of Revenue, certain
employers, fiduciaries, individuals, persons, corporations
and other entities; prescribing crimes, offenses and
penalties," providing for a long-term care tax credit.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. The act of March 4, 1971 (P.L.6, No.2), known as
the Tax Reform Code of 1971, is amended by adding an article to
read:
ARTICLE XVII-F
LONG-TERM CARE INSURANCE TAX CREDIT
Section 1701-F. Scope of article.
This article relates to long-term care insurance tax credits.
Section 1702-F. Definitions.
The following words and phrases when used in this article
shall have the meanings given to them in this section unless the
context clearly indicates otherwise:
"Department." The Department of Revenue of the Commonwealth.
"Long-term care insurance." An insurance policy, offered to
an employee by an employer, to provide coverage when long-term
care is needed, including chronic illness or disability and
expenses for a nursing home, an assisted living facility, home
care, a visiting nurse, a home health aide, a friendly visitor
program, home-delivered meals, chore services, adult day-care
centers or respite services.
"Long-term care insurance expenses." Expenses associated
with providing long-term care insurance.
"Qualified tax liability." The liability for taxes imposed
under Article III, IV or VI. The term shall include the
liability for taxes imposed under Article III on an owner of a
pass-through entity.
"Pass-through entity." Any of the following:
(1) A partnership, limited partnership, limited
liability company, business trust or other unincorporated
entity that for Federal income tax purposes is taxable as a
partnership.
(2) A Pennsylvania S corporation.
"Secretary." The Secretary of Revenue of the Commonwealth.
"Small business." An employer who, on at least 50% of its
working days during the taxable year, employed fewer than 100
people.
"Tax credit." The long-term care insurance tax credit
authorized under this article.
20090HB0763PN0853 - 2 -
"Taxpayer." An entity subject to tax under Article III, IV
or VI. The term includes the shareholder, owner or member of a
pass-through entity that receives a tax credit.
Section 1703-F. Credit for long-term care insurance.
(a) Application.--A taxpayer who purchases long-term care
insurance in a taxable year may apply for a tax credit as
provided in this article. By September 15, a taxpayer must
submit an application to the department for long-term care
insurance expenses incurred in the taxable year that ended in
the prior calendar year.
(b) Amount.--A taxpayer that is qualified under subsection
(a) shall receive a tax credit for the taxable year in the
amount of 20% of the long-term care insurance expenses incurred
by the taxpayer during the taxable year.
(c) Notification.--By December 15 of the calendar year
following the close of the taxable year during which the long-
term care insurance expense was incurred, the department shall
notify the taxpayer of the amount of the taxpayer's tax credit
approved by the department.
Section 1704-F. Carryover, carryback, refund and assignment of
credit.
(a) Credit.--If the taxpayer cannot use the entire amount of
the tax credit for the taxable year in which the tax credit is
first approved, the excess may be carried over to succeeding
taxable years and used as a credit against the qualified tax
liability of the taxpayer for those taxable years. Each time the
tax credit is carried over to a succeeding taxable year, it is
to be reduced by the amount that was used as a credit during the
immediately preceding taxable year. The tax credit may be
carried over and applied to succeeding taxable years for no more
20090HB0763PN0853 - 3 -
than 15 taxable years following the first taxable year for which
the taxpayer was entitled to claim the credit.
(b) Application.--A tax credit approved by the department
for long-term care insurance expenses in a taxable year first
shall be applied against the taxpayer's qualified tax liability
for the current taxable year as of the date on which the credit
was approved before the tax credit is applied against any tax
liability under subsection (a).
(c) Prohibition.--A taxpayer is not entitled to assign,
carry back or obtain a refund of an unused tax credit.
Section 1705-F. Time limitations.
A taxpayer shall not be entitled to a tax credit for long-
term care insurance expenses incurred in taxable years ending
after December 31, 2018.
Section 1706-F. Limitation on credits.
(a) Total.--The total amount of tax credits approved by the
department shall not exceed $20,000,000 in any fiscal year. Of
that amount, $5,000,000 shall be allocated exclusively for small
businesses. If the total amounts allocated to either the group
of applicants, exclusive of small businesses, or the group of
small business applicants is not approved in any fiscal year,
the unused portion shall become available for use by the other
group of qualifying taxpayers.
(b) Proration among all applicants.--If the total amount of
tax credits applied for by all applicants, exclusive of small
businesses, exceeds the amount allocated for those credits, then
the tax credit to be received by each applicant shall be
prorated by the department among all applicants, exclusive of
small businesses, who have qualified for the credit.
(c) Proration among small business applicants.--If the total
20090HB0763PN0853 - 4 -
amount of tax credits applied for by all small businesses
exceeds the amount allocated for those credits, then the tax
credit to be received by each small business applicant shall be
prorated by the department among all small business applicants
who have qualified for the credit.
Section 1707-F. Shareholder, owner or member pass-through.
(a) Pennsylvania S corporation shareholder.--If a
Pennsylvania S corporation does not have an eligible tax
liability against which the tax credit may be applied, a
shareholder of the Pennsylvania S corporation shall be entitled
to a tax credit equal to the tax credit determined for the
Pennsylvania S corporation for the taxable year multiplied by
the percentage of the Pennsylvania S corporation's distributive
income to which the shareholder is entitled.
(b) Pass-through entity owner or member.--If a pass-through
entity other than a Pennsylvania S corporation does not have an
eligible tax liability against which the tax credit may be
applied, an owner or member of the pass-through entity is
entitled to a tax credit equal to the tax credit determined for
the pass-through entity for the taxable year multiplied by the
percentage of the pass-through entity's distributive income to
which the owner or member is entitled.
(c) Additional credit.--The credit provided under subsection
(a) or (b) shall be in addition to any tax credit to which a
shareholder, owner or member of a pass-through entity is
otherwise entitled under this article, except that a pass-
through entity and a shareholder, owner or member of a pass-
through entity may not claim a credit under this article for the
same long-term care insurance expense.
Section 1708-F. Report to General Assembly.
20090HB0763PN0853 - 5 -
The secretary shall submit an annual report to the General
Assembly indicating the effectiveness of the credit provided by
this article no later than March 15 following the year in which
the credits were approved. The report shall include the names of
all taxpayers utilizing the credit as of the date of the report
and the amount of credits approved and utilized by each
taxpayer. Notwithstanding any law providing for the
confidentiality of tax records, the information contained in the
report shall be public information. The report may also include
any recommendations for changes in the calculation or
administration of the credit.
Section 1709-F. Termination.
The department shall not approve a tax credit under this
article for taxable years ending after December 31, 2018.
Section 1710-F. Regulations.
The secretary shall promulgate regulations necessary for the
implementation and administration of this article.
Section 2. The addition of Article XVII-F of the act shall
apply to taxable years beginning after December 31, 2008.
Section 3. This act shall take effect in 60 days.
20090HB0763PN0853 - 6 -