Small Business Health Care Tax Credit Improvement Act of 2013

To amend the Internal Revenue Code of 1986 to expand and simplify the credit for employee health insurance expenses of small employers. 1. Short title This Act may be cited as the Small Business Health Care Tax Credit Improvement Act of 2013 2. Expansion and simplification of credit for employee health insurance expenses of small employers (a) Increase in maximum number of eligible full-Time employees Subparagraph (A) of section 45R(d)(1) 25 full-time equivalent employees 50 full-time equivalent employees (b) Modification of phaseout of credit amount (1) In general Subsection (c) of section 45R of such Code is amended to read as follows: (c) Phaseout of credit amount based on number of employees and average wages (1) In general The amount of the credit determined under subsection (b) shall be adjusted by multiplying— (A) the amount determined under subsection (b), by (B) the product of the amount determined under paragraph (2) and the amount determined under paragraph (3). (2) Employee adjustment The amount determined under this paragraph is a fraction (not more than 1) the numerator of which is the number by which the total number of full-time equivalent employees of the eligible employer is less than 50 and the denominator of which is 30. (3) Wages adjustment The amount determined under this paragraph is a fraction (not more than 1) the numerator of which is the amount by which the average annual wages of the eligible employer is less than twice the dollar amount in effect under subsection (d)(3)(B) and the denominator of which is such dollar amount. . (2) Conforming amendments (A) Subsection (a) of section 45R of such Code is amended by inserting , as adjusted under subsection (c) the amount determined under subsection (b) (B) Subsection (b) of section 45R of such Code is amended by striking Subject to subsection (c), the The (C) Subparagraph (B) of section 45R(d)(3) of such Code is amended by striking subsection (c)(2) subsection (c)(3) (c) Average annual wage limitation increase (1) 2012 and 2013 Clause (i) of section 45R(d)(3)(B) of such Code is amended to read as follows: (i) 2010, 2011, 2012, and 2013 The dollar amount in effect under this paragraph is— (I) for taxable years beginning in 2010, 2011, or 2012, $25,000, and (II) for taxable years beginning in 2013, $28,500. . (2) Subsequent years Clause (ii) of section 45R(d)(3)(B) of such Code is amended by striking $25,000 $28,500 (d) Repeal of uniformity requirement for contributions Paragraph (4) of section 45R(d) of such Code is amended— (1) by striking in an amount equal to a uniform percentage (not less than 50 percent) of the premium cost of the qualified health plan (2) by inserting (in an amount not less than 50 percent of the premium cost of the qualified health plan) nonelective contribution (e) Repeal of limitation based on state average premiums (1) In general Subsection (b) of section 45R of such Code is amended to read as follows: (b) Health insurance credit amount Subject to subsection (c), the amount determined under this subsection with respect to any eligible small employer is equal to 50 percent (35 percent in the case of a tax-exempt eligible small employer) of 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. . (2) Conforming amendment Paragraph (2) of section 45R(g) of such Code is amended by inserting and , and (f) Effective date The amendments made by this section shall apply to taxable years beginning after December 31, 2012.

Summary: Small Business Health Care Tax Credit Improvement Act of 2013 - Amends the Internal Revenue Code, with respect to the tax credit for the health insurance expenses of small employers, to: (1) expand the eligibility of such employers for the credit by allowing them to have up to 50 full-time employees (currently, limited to no more than 25 full-time employees); (2) modify the phaseout of such credit based upon increases in the number of eligible employees and the employer's average annual wages; (3) increase the average annual wage limitation for 2013 and subsequent years; (4) repeal the requirement that employers make uniform contributions of at least 50% of each employee's premium to qualify for the tax credit; and (5) repeal the limitation on such credit based on the average premium in the small group market in the rating area in which an employee enrolls for coverage.