ASSEMBLY COMMITTEE SUBSTITUTE FOR

ASSEMBLY, No. 516

 

STATE OF NEW JERSEY

 

 

ADOPTED MARCH 4, 1996

 

Sponsored by Assemblywoman CRECCO

 

An Act providing a corporation business tax and gross income tax credit for certain costs of long-term care insurance coverage, supplementing P.L.1945, c.162 (C.54:10A-1 et seq.) and Title 54A of the New Jersey Statutes.

 

      Be It Enacted by the Senate and General Assembly of the State of New Jersey:

 

      1. a. A taxpayer that provides long-term care insurance coverage for the taxpayer's employees shall be allowed a credit against the tax imposed pursuant to section 5 of P.L.1945, c.162 (C.54:10A-5) for a fiscal or calendar accounting year in an amount equal to 25% of the cost of providing the coverage for the employees during that accounting year.

      b. The amount of the credit claimed in an accounting year in which the cost is incurred shall not exceed 50% of the tax liability otherwise due that year, and shall not reduce the tax liability to an amount less than the statutory minimum provided in subsection (e) of section 5 of P.L.1945, c.162 (C.54:10A-5).

      The tax imposed for a fiscal or calendar accounting year pursuant to section 5 of P.L.1945, c.162 shall first be reduced by the amount of any credit allowed pursuant to section 19 of P.L.1983, c.303 (C.52:27H-78), then by any credit allowed pursuant to section 12 of P.L.1985, c.227 (C.55:19-13), then by any credit allowed pursuant to section 42 of P.L.1987, c.102 (C.54:10A-5.3), then by any credit allowed under section 3 of P.L.1993, c.150 (C.27:26A-15), then by any credit allowed under section 3 of P.L.1993, c.170 (C.54:10A-5.6), and then by any credit allowed under section 3 or 4 of P.L.1993, c.171 (C.54:10A-5.18 or C.54:10A-5.19), and then by any credit allowed under section 1 of P.L.1993, c.175 (C.54:10A-5.24), before applying the credit allowable pursuant to this section.

      c. As used in this section:

      "Long-term care insurance coverage" means a group or individual insurance policy, or portion thereof, which provides benefits for a period of not less than 12 months for each person covered under the policy on an expense incurred, indemnity, or annuity basis, or combination thereof, for necessary diagnostic, preventive, therapeutic or custodial services in a setting other than an acute care unit of a hospital. Long-term care services may include, but are not limited to, nursing home care, home health care, assisted living residence care, alternative family living care or other similar types of community-based care for which long-term care insurance coverage is available.

      "Cost of providing the coverage" means the cost of premiums incurred by the taxpayer for the purchase of long-term care insurance policies for employees.

 

      2. a. A taxpayer who provides long-term care insurance coverage for the taxpayer's employees, or a taxpayer who purchases long-term care insurance coverage for the taxpayer's personal benefit or the taxpayer's dependents, shall be allowed a credit against the tax imposed pursuant to N.J.S.54A:2-1 et seq. in an amount equal to 25% of the cost of providing or purchasing the coverage during a taxable year.

      b. If the provider is a partnership or association, the credit shall be allocated to each member of the partnership or association in proportion to the member's share of the income or gain received by the partnership or association for its taxable year ending within or with the member's taxable year.

      c. The amount of the credit claimed for the taxable year shall not exceed 50% of the tax liability which would be otherwise due for that year.

      d. As used in this section:

      "Long-term care insurance coverage" means a group or individual insurance policy, or portion thereof, which provides benefits for a period of not less than 12 months for each person covered under the policy, on an expense incurred, indemnity, or annuity basis, or combination thereof, for necessary diagnostic, preventive, therapeutic or custodial services in a setting other than an acute care unit of a hospital. Long-term care services may include, but are not limited to, nursing home care, home health care, assisted living residence care, alternative family living care or other similar types of community-based care for which long-term care insurance coverage is available.

      "Cost of providing or purchasing the coverage" means cost of premiums incurred by the taxpayer for the purchase of long-term care insurance policy or policies.

      "Taxpayer's dependents" means the taxpayer's spouse or parents, parents of the taxpayer's spouse, or the natural or adopted children of the taxpayer.

 

      3. This act shall take effect immediately, and section 1 shall apply to accounting years beginning on or after January 1 of the year next following enactment and section 2 shall apply to taxable years beginning on or after January 1 of the year next following enactment.

 

 

 

Creates corporation business tax and gross income tax credits for certain costs of long-term care insurance policies.