Sec. 1. 36 MRSA §5219-Q is enacted to read:

§5219-Q.__Health insurance premium tax credit

1.__Credit.__A taxpayer that does not constitute an employing unit is allowed a credit against the tax imposed by this Part for each taxable year equal to 50% of the amount of health insurance premium paid by the taxpayer.

2.__Eligible taxpayers.__A taxpayer is eligible for a credit under this section if:

A.__The taxpayer pays the full premium for health insurance coverage; or

B.__The taxpayer pays a portion of the health insurance premium under a health insurance program offered by the taxpayer's employer.

3.__Limitation. The amount of the credit allowed under this section may not exceed $4,000 in any tax year and may not exceed the amount of tax otherwise due under this Part.__This credit may not reduce the state income tax to less than zero.__Any unused credit may not be carried over to the following year.

4.__Application.__This section applies to health insurance premiums paid in any tax year beginning on or after January 1, 2000.

As used in this section, "taxpayer" means an individual.

SUMMARY

This bill establishes a state income tax credit for up to 50% of the health insurance premiums paid by individuals. The credit is available to individuals that pay the full premium for health insurance and also to individuals that pay a portion of the premium under a health insurance program offered through their employer. The credit applies to premiums paid in any tax year beginning on or after January 1, 2000.