Sec. 4. Transitional financial assistance
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Subpart C of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by inserting after section 36B the following new section: In the case of an eligible individual, there shall be allowed as a credit against the tax imposed by subtitle A an amount equal to the applicable percentage of the amount paid by the taxpayer for coverage of the taxpayer and qualifying family members under continuation coverage for eligible coverage months beginning in the taxable year.
For purposes of subsection (a), the applicable percentage is 65 percent reduced by 5 percentage points for each coverage month for which a credit is allowable to the taxpayer under this section after the sixth such coverage month. For purposes of this section— The term eligible individual means any individual who elects to retain continuation of coverage under section 2796 of the Public Health Service Act. The term eligible individual shall not include any individual for any month unless the policy number associated with the qualified health insurance and the TIN of each eligible individual covered under such health insurance for such month are included on the return of tax for the taxable year in which such month occurs.
For purposes of this section— The term coverage month means any month if as of the first date of such month the taxpayer is an eligible individual who does not have other specified coverage. For purposes of paragraph (1), an individual has other specified coverage for any month if, as of the first day of such month if such individual— is covered under employer-provided health insurance, is entitled to benefits under part A of title XVIII of the Social Security Act or is enrolled under part B of such title, is enrolled under the program under title XIX or XXI of such Act (other than under section 1928 of such Act), or is entitled to benefits under chapter 55 of title 10, United States Code.
For purposes of this section— The term continuation coverage means coverage described in section 2796(a)(2) of the Public Health Service Act. The term qualifying family member has the meaning given such term under section 35(d). 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 7527A for months beginning in such taxable year. Any amount paid by a taxpayer for insurance to which subsection
(a)applies shall not be taken into account in computing the amount allowable to the taxpayer as a credit under this chapter or as a deduction under section 213(a). No credit shall be allowed under this section to any individual with respect to whom a deduction under section 151 is allowable to another taxpayer for a taxable year beginning in the calendar year in which such individual’s taxable year begins. If the taxpayer is married at the close of the taxable year, the credit shall be allowed under subsection
(a)only if the taxpayer and his spouse file a joint return for the taxable year. Rules similar to the rules of paragraphs
(3)and
(4)of section 21(e) shall apply for purposes of this paragraph. The Secretary shall ensure that procedures are in place to ensure that the coverage eligibility of the individual is verified. Rules similar to the rules of paragraphs
(7)and
(8)of section 35(g) shall apply for purposes of this section. . Chapter 77 of the Internal Revenue Code of 1986 is amended by inserting after section 7527 the following new section: The Secretary shall establish a program for making payments on behalf of taxpayers who are eligible individuals within the meaning of section 36C(c) to providers of continuation coverage (as defined in section 36C(e)(1)) for such individuals. The Secretary may make payments under subsection
(a)only to the extent that the Secretary determines that the amount of such payments made on behalf of any taxpayer for any month does not exceed the applicable percentage under section 36C(b) for the taxpayer for such month. . Subpart B of part III of subchapter A of chapter 61 of the Internal Revenue Code of 1986 is amended by inserting after section 6050W the following new section: Every person who is entitled to receive payments for any month of any calendar year under section 7527A with respect to any individual shall make the return described in subsection
(b)with respect to each such individual. A return is described in this subsection if such return— is in such form as the Secretary may prescribe, and contains, with respect to each individual referred to in subsection (a)— the name, address, and TIN of each such individual, the months for which amounts payments under section 7527A were received, the amount of each such payment, the type of insurance coverage provided by such person with respect to such individual and the policy number associated with such coverage, if applicable, the name, address, and TIN of the spouse and each dependent covered under such coverage, and such other information as the Secretary may prescribe. Every person required to make a return under subsection
(a)shall furnish to each individual whose name is required to be set forth in such return a written statement showing— the name and address of the person required to make such return and the phone number of the information contact for such person, and the information required to be shown on the return with respect to such individual. The written statement required under the preceding sentence shall be furnished on or before January 31 of the year following the calendar year for which the return under subsection
(a)is required to be made. . Subparagraph
(B)of section 6724(d)(1) of such Code is amended by striking or at the end of clause (xxiv), by striking and at the end of clause
(xxv)and inserting or , and by inserting after clause (xxiii) the following new clause: section 6050X (relating to returns relating to qualified health insurance credit), and . Paragraph
(2)of section 6724(d) of such Code is amended by striking or at the end of subparagraph (GG), by striking the period at the end of subparagraph
(HH)and inserting , or , and by inserting after subparagraph
(HH)the following new subparagraph: section 6050X (relating to returns relating to qualified health insurance credit). . Paragraph
(2)of section 1324(b) of title 31, United States Code, is amended by inserting 36C, after 36B, . The table of sections for subpart C of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by inserting after the item relating to section 36B the following new item: Sec. 36C. Credit for continuation coverage under a qualified health plan. . The table of sections for chapter 77 of such Code is amended by inserting after the item relating to section 7527 the following new item: Sec. 7527A. Advance payment of continuation coverage credit. . The table of sections for subpart B of part III of subchapter A of chapter 61 of such Code is amended by adding at the end the following new item: Sec. 6050X. Returns relating to continuation coverage credit. . The amendments made by this section shall apply to coverage months beginning after the date of a qualifying event determined under section 2796(b) of the Public Health Service Act (as added by section 2) with respect to the individual.