[Congressional Bills 112th Congress]
[From the U.S. Government Publishing Office]
[S. 2227 Introduced in Senate (IS)]

112th CONGRESS
  2d Session
                                S. 2227

 To amend the Internal Revenue Code of 1986 to expand and simplify the 
   credit for employee health insurance expenses of small employers.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             March 22, 2012

Mr. Kerry (for himself and Ms. Landrieu) introduced the following bill; 
     which was read twice and referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
 To amend the Internal Revenue Code of 1986 to expand and simplify the 
   credit for employee health insurance expenses of small employers.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Small Business Health Care Tax 
Credit Improvement Act of 2012''.

SEC. 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) of the Internal Revenue Code of 
1986 is amended by striking ``25 full-time equivalent employees'' and 
inserting ``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)'' after ``the amount determined under subsection 
                (b)''.
                    (B) Subsection (b) of section 45R of such Code is 
                amended by striking ``Subject to subsection (c), the'' 
                and inserting ``The''.
                    (C) Subparagraph (B) of section 45R(d)(3) of such 
                Code is amended by striking ``subsection (c)(2)'' and 
                inserting ``subsection (c)(3)''.
    (c) Average Annual Wage Limitation Increase.--
            (1) 2012 and 2013.--Clause (i) of section 45R(d)(3) 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 or 2011, $25,000, and
                                    ``(II) for taxable years beginning 
                                in 2012 or 2013, $28,500.''.
            (2) Subsequent years.--Clause (ii) of section 45R(d)(3) of 
        such Code is amended by striking ``$25,000'' and inserting 
        ``$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'', and
            (2) by inserting ``(in an amount not less than 50 percent 
        of the premium cost of the qualified health plan)'' after 
        ``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'' at the end of 
        subparagraph (A), by striking ``, and'' at the end of 
        subparagraph (B) and inserting a period, and by striking 
        subparagraph (C).
    (f) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2011.
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