Bill > HB2550

This bill establishes a new tax credit called the "Small Business Health Care Premiums Contribution Tax Credit" for qualified taxpayers, which are businesses with 50 or fewer employees that are subject to state income tax and required to withhold federal income tax. This credit is intended to help these small businesses by allowing them to claim 100% of the "aggregate contribution" they make towards their employees' health insurance costs, up to the first $1,000 per employee per year. An "aggregate contribution" refers to the total amount an employer contributes to an employee's health reimbursement arrangement, which is a tax-advantaged plan that helps employees pay for eligible health insurance costs, such as premiums for qualified health plans purchased through the Pennsylvania Health Insurance Exchange Authority. The bill also includes provisions for how pass-through entities, like partnerships or S corporations, can transfer this credit to their owners, specifies that the first $5,000 in contributions are not considered taxable income for employees, and mandates that employers must offer equal contributions to all employees who have eligible health insurance costs if they choose to claim the credit. Furthermore, the bill requires the Exchange Authority to report on fraud prevention efforts related to these contributions, and the credit will apply to taxable years beginning after December 31, 2026.