What's happening
Writing a plain-English summary… Track this bill to get it by email.
Why it matters
Albany, before your first meeting.
Every bill that moved yesterday, summarized in a sentence and ranked by impact. The Albany Scorecard follows on Sundays.
Free. Unsubscribe in one click. Want alerts on specific bills? Create an account.
Who cares
Headline styles
Sponsors
History
- Referred to investigations and government operations
- Referred to investigations and government operations
Full text
The text isn't available here yet. Check nysenate.gov.
Sponsor's memo
Title of bill
An act to amend the tax law, in relation to granting tax credits to employers providing health insurance coverage to certain employees who are not otherwise covered by health insurance and providing a personal income tax credit for premiums paid for health insurance by certain taxpayers
Purpose
This bill provides a 25 percent tax credit, gradually implemented over 5 years, for the cost of providing health insurance coverage to individuals who have not had coverage in the past 6 months and to businesses that provide health insurance to their employees who have not had health insurance for the previous 6 months. The tax credit will be phased in over a 5 year period of time. In addition, such employees must meet certain household income criteria. Further, this tax credit is available to persons who purchase their own health insurance without the help of an employer.
Summary of provisions
Section 1: Amends Tax Law section 210 to grant a business a franchise tax credit in the amount of 25 percent of the cost of providing health insurance coverage for certain qualifying employees. The 25 percent tax credit will be phased in over a five year period of time and applies to all businesses that have not provided health insurance to these employees for at least 6 months. The employee costs that qualify are employees that have taxable income of $40,000 or less for a single person, $60,000 or less for a two person family, $75,000 or less for a three person family, $85,000 or less for a four person family, and an additional $7,500 for each additional person. Qualifying health insurance coverage includes, all direct pay policies, small group policies, policies issued by Art. 43 corporations, Healthy NY policies, and Family Health Plus.
Read the full memo (811 words)
Section 2: Amends Tax Law section 606(i) in the same manner as stated above to grant a personal income tax credit.
Section 3: Amends Tax Law section 606 to add (qq) and (IT) to grant a personal income tax credit to individuals that purchase health insurance coverage without the support of their employer. To qualify, the individual would have needed to have been without health insurance for at least 6 months.
Section 4: Amends Tax Law section 1456 to allow banking corporations, which are not covered by the franchise tax provisions of Tax Law section 210, to allow such corporations to obtain the tax credits outlined above.
Section 5: Amends Tax Law section 1511 to allow insurance corporations, which are not covered by the franchise tax provisions of Tax Law section 210, to allow such corporations to obtain the tax credits outlined above.
Existing law
Under current law, businesses that provide health insurance can deduct these costs from their gross income as a legitimate business expense. However, individuals who do not have coverage from their employer are not allowed any deduction of these expenses. Further, businesses that provide their employees with health insurance obtain an income tax deduction for those expenses. However, employers are increasingly forgoing the provision of health insurance to their employees because the amount of the income tax deduction is insufficient to cover the cost of this increasingly expensive employee benefit.
Justification
The Commonwealth Fund's Task Force on the Future of Health Insurance issued a report in March 2004 entitled "Job-Based Health Insurance in the Balance: Employer Views of Coverage in the Work Place". This report suggested that one of the biggest problems with granting tax credits to encourage more individuals and businesses to purchase health insurance coverage is that the persons who are most in need of these tax credits do not have sufficient funds to advance the high cost of health insurance and then wait until the end of tax year to receive the credit. This bill implements this report's suggestions in an attempt to increase the number of persons that have health insurance coverage.
This bill grants a tax credit to taxpaying individuals and businesses so that the affect is to reduce, throughout the year, the income tax withholdings that individuals need to pay so that such money can be used to purchase health insurance. The same affect is directed to businesses so that business quarterly tax escrow payments can be reduced so that businesses will be able to afford to provide health insurance coverage for their employees.
In addition, this bill's 25% tax credit on the cost of purchasing health insurance may provide the added incentive that businesses need to purchase health insurance for their employees. This is in addition to the business income tax deduction that such businesses receive for paying for employee health insurance benefits.
Legislative history
Similar to S.6848 of 2006, S.7642 of 2008
Fiscal implications
To be determined.
Local fiscal implications
None.
Effective date
Immediate, but to apply to the 2009 tax year.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.