An Act amending the act of March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code of 1971, providing for Small Business Health Care Premiums Contribution Tax Credit.

Source of recordPennsylvania · palegis.usLast synced Sep 4, 2026

Chamber

Senate

Progress

Where this bill stands in the legislative process.

Introduced
Passed Senate
Passed House
To Governor
Became Law

Overview

This bill creates a tax credit for small businesses in Pennsylvania to help cover the costs of providing health insurance premiums to their employees. Qualified small businesses can claim a credit equal to 100% of the contributions they make to employees’ health reimbursement arrangements. The bill establishes definitions, outlines application procedures, and addresses how the credit can be carried over or transferred to shareholders of pass-through entities. It also includes provisions to prevent fraud and ensure nondiscrimination in contributions.

Key provisions

Establishes a Small Business Health Care Premiums Contribution Tax Credit.
The credit is equal to 100% of the aggregate contribution made by a qualified taxpayer to an employee’s health reimbursement arrangement.
Qualified taxpayers must complete an application detailing employee information, health insurance provider details, and contribution amounts.
Pass-through entities can elect to transfer the credit to shareholders in proportion to their ownership.
A limit is placed on the amount of credit that can be claimed by both the pass-through entity and its shareholders.
The first $5,000 in contributions is excluded from income calculations.
Requires reporting of suspected fraud to relevant law enforcement agencies.
Establishes procedures for insurers to report suspected fraud to the Exchange Authority.