Pennsylvania HB 565: An Act amending the act of March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code of 1971, providing for employer health insurance contribution tax credit; and promulgating regulations.

Bill Text

PRINTER'S NO. 569
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No. 565
Session of
2025
INTRODUCED BY OLSOMMER, PICKETT, KENYATTA, ROWE AND ZIMMERMAN,
FEBRUARY 12, 2025
REFERRED TO COMMITTEE ON FINANCE, FEBRUARY 12, 2025
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 employer health insurance
contribution tax credit; and promulgating regulations.
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 XIX-L
EMPLOYER HEALTH INSURANCE CONTRIBUTION TAX CREDIT
Section 1901-L. Scope of article.
This article establishes the Employer Health Insurance
Contribution Tax Credit.
Section 1902-L. Definitions.
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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:
"Aggregate contribution." The aggregate contribution that a
qualified taxpayer makes to all employees during the taxable
year for which the qualified taxpayer seeks the employer health
insurance contribution tax credit established under this
article, provided that only the first $500 in contributions per
employee shall count toward the aggregate contribution.
"Contribution." A payment made to a health insurance
provider by an employer to subsidize an employee's eligible
health insurance premiums.
"Department." The Department of Revenue of the Commonwealth.
"Eligible health insurance costs." Costs incurred by an
employee for premiums of a health insurance provider that are
incurred to enable the employee to be gainfully employed by a
qualified taxpayer.
"Employee." An individual employed by a qualified taxpayer.
The term does not include:
(1) An officer of an entity subject to tax under Article
IV, VIII, XV or XX.
(2) An officer of an insurance company subject to tax
under Article IX.
"Health insurance provider." The term shall have the same
meaning as "insurer" under section 201-A of the act of May 17,
1921 (P.L.789, No.285), known as The Insurance Department Act of
1921.
"Pass-through entity." Any of the following:
(1) A partnership as defined in section 301(n.0).
(2) A Pennsylvania S corporation as defined in section
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301(n.1).
(3) An unincorporated entity subject to section 307.21.
"Qualified tax liability." Any of the taxes due under
Article III, IV, VII, VIII, IX, XI, XV or XX or a tax under
Article XVI of the act of May 17, 1921 (P.L.682, No.284), known
as The Insurance Company Law of 1921. The term does not include
any tax withheld by an employer from an employee under Article
III.
"Qualified taxpayer." An individual, partnership,
association, corporation, governmental body or unit or agency or
other entity that:
(1) is subject to a tax imposed under Article III, IV,
VII, VIII, IX, XI, XV or XX; and
(2) is required under the Internal Revenue Code of 1986
(Public Law 99-514, 26 U.S.C. § 1 et seq.) to withhold
Federal income tax from wages paid to an employee.
Section 1903-L. Employer health insurance contribution tax
credit.
(a) Credit.--A qualified taxpayer may claim the employer
health insurance contribution tax credit for a contribution made
during the taxable year toward an employee's eligible health
insurance premium costs and may apply the tax credit against its
qualified tax liability.
(b) Application.--A qualified taxpayer applying to claim an
employer health insurance contribution tax credit must complete
and submit to the department a health insurance contribution tax
credit application on a form and in a manner as determined by
the department. The form shall require the qualified taxpayer to
provide the following:
(1) The names, addresses and Social Security numbers of
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all employees to which the qualified taxpayer made a
contribution during the taxable year.
(2) The names, addresses and employer identification
numbers of the health insurance providers that provided
health insurance services to each participating employee.
(3) The amount contributed to each participating
employee.
(4) The aggregate contribution.
(c) Amount of tax credit.--The tax credit amount shall be as
follows:
(1) If the contribution was made to less