Sec. 101. Refundable tax credit for health insurance costs of low-income individuals
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Subpart C of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986, as amended by section 2, is amended by inserting after section 36A the following new section: In the case of an individual, there shall be allowed as a credit against the tax imposed by subtitle A the aggregate amount paid by the taxpayer for coverage of the taxpayer and the taxpayer’s qualifying family members under qualified health insurance for eligible coverage months beginning in the taxable year. The amount allowable as a credit under subsection
(a)for the taxable year shall not exceed the lesser of— the sum of the monthly limitations for months during such taxable year that the taxpayer or the taxpayer’s qualifying family members is an eligible individual, and the aggregate premiums paid by the taxpayer for the taxable year for coverage described in subsection (a). The monthly limitation for any month is the credit percentage of 1/12 of the sum of— $2,000 for coverage of the taxpayer ($4,000 in the case of a joint return for coverage of the taxpayer and the taxpayer’s spouse), and $500 for coverage of each dependent of the taxpayer. For purposes of this section, the term credit percentage means 100 percent reduced by 1 percentage point for each $1,000 (or fraction thereof) by which the taxpayer’s adjusted gross income for the taxable year exceeds the threshold amount. For purposes of this paragraph, the term threshold amount means, with respect to any taxpayer for any taxable year, 200 percent of the Federal poverty guideline (as determined by the Secretary of Health and Human Services for the taxable year) applicable to the taxpayer. Not more than 2 dependents of the taxpayer may be taken into account under paragraphs (2)(C) and (3)(B). In the case of any taxable year beginning in a calendar year after 2013, each dollar amount contained in paragraph
(2)shall be increased by an amount equal to— such dollar amount, multiplied by the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, determined by substituting calendar year 2012 for calendar year 1992 in subparagraph
(B)thereof. Any increase determined under the preceding sentence shall be rounded to the nearest multiple of $50. For purposes of this section, the term eligible coverage month means, with respect to any individual, any month if, as of the first day of such month, the individual— is covered by qualified health insurance, does not have other specified coverage, and is not imprisoned under Federal, State, or local authority. For purposes of this section, the term qualifying family member means— in the case of a joint return, the taxpayer’s spouse, and any dependent of the taxpayer. For purposes of this section, the term qualified health insurance means health insurance coverage (other than excepted benefits as defined in section 9832(c)) which constitutes medical care. For purposes of this section, an individual has other specified coverage for any month if, as of the first day of such month— Such individual— is entitled to benefits under part A of title XVIII of the Social Security Act or is enrolled under part B of such title, or is enrolled in the program under title XIX or XXI of such Act (other than under section 1928 of such Act). Such individual— is enrolled in a health benefits plan under chapter 89 of title 5, United States Code, is entitled to receive benefits under chapter 55 of title 10, United States Code, is entitled to receive benefits under chapter 17 of title 38, United States Code, is enrolled in a group health plan (within the meaning of section 5000(b)(1)) which is subsidized by the employer, or is a member of a health care sharing ministry. For purposes of this subsection, the term health care sharing ministry means an organization— which is described in section 501(c)(3) and is exempt from taxation under section 501(a), members of which share a common set of ethical or religious beliefs and share medical expenses among members in accordance with those beliefs and without regard to the State in which a member resides or is employed, members of which retain membership even after they develop a medical condition, which (or a predecessor of which) has been in existence at all times since December 31, 1999, and medical expenses of its members have been shared continuously and without interruption since at least December 31, 1999, and which conducts an annual audit which is performed by an independent certified public accounting firm in accordance with generally accepted accounting principles and which is made available to the public upon request. With respect to any taxable year— the amount which would (but for this subsection) be allowed as a credit to the taxpayer under subsection
(a)shall be reduced (but not below zero) by the aggregate amount paid on behalf of such taxpayer under section 7529 for months beginning in such taxable year, and the tax imposed by section 1 for such taxable year shall be increased by the excess (if any) of— the aggregate amount paid on behalf of such taxpayer under section 7529 for months beginning in such taxable year, over the amount which would (but for this subsection) be allowed as a credit to the taxpayer under subsection (a). Amounts taken into account under subsection
(a)shall not be taken into account in determining— any deduction allowed under section 162(l), 213, or 224, or any credit allowed under section 35. Amounts distributed from an Archer MSA (as defined in section 220(d)) or from a health savings account (as defined in section 223(d)) shall not be taken into account under subsection (a). No credit shall be allowed under this section to any individual who is— not a citizen or lawful permanent resident of the United States for the calendar year in which the taxable year begins, or a dependent with respect to another taxpayer for a taxable year beginning in the calendar year in which such individual’s taxable year begins. For purposes of this section, rules similar to the rules of section 213(d)(6) shall apply with respect to any contract for qualified health insurance under which amounts are payable for coverage of an individual other than the taxpayer and qualifying family members. For purposes of this section— Payments made by the Secretary on behalf of any individual under section 7529 (relating to advance payment of credit for health insurance costs of low-income individuals) shall be treated as having been made by the taxpayer on the first day of the month for which such payment was made. Payments made by the taxpayer for eligible coverage months shall be treated as having been made by the taxpayer on the first day of the month for which such payment was made. The Secretary may prescribe such regulations and other guidance as may be necessary or appropriate to carry out this section, section 6050W, and section 7529. . Paragraph
(2)of section 1324(b) of title 31, United States Code, as amended by section 2, is amended by inserting 36B, after 36A, . The table of sections for subpart C of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986, as amended by section 2, is amended by inserting after the item relating to section 36A the following new item: Sec. 36B. Health insurance costs of low-income individuals. . The amendments made by this section shall apply to taxable years beginning after December 31, 2013. It is the sense of Congress that the cost of the advanceable refundable credit under sections 36B and 7529 of the Internal Revenue Code of 1986, as added by this title, will be offset by savings derived from the provisions of title XIII.