Tax Credit For Dependent Health Benefits Paid Worksheet

2011

TAX CREDIT FOR DEPENDENT HEALTH BENEFITS PAID

WORKSHEET INSTRUCTIONS

This credit is available to employers that offer a qualiﬁ ed health beneﬁ t plan and that employ fewer than ﬁ ve employees.

This credit is equal to the lesser of 20% of the dependent health beneﬁ ts paid by the employer for low-income employees

or $125 per low-income employee with dependent health coverage. A taxpayer that employs ﬁ ve or more employees after

qualifying for the credit may continue to qualify for the credit for another two years. Otherwise, a taxpayer may claim a

credit only for those periods during which the employer: 1) offers a qualiﬁ ed health beneﬁ t plan that is made available to all

low-income employees; 2) pays at least 80% of the health insurance costs for each low-income employee under the plan;

and 3) pays at least 60% of the cost of dependent health insurance beneﬁ ts for children under 19 who are dependents of

low-income employees under the plan. The credit is limited to 50% of the regular income tax due. Any unused credit may

be carried forward for two years.

“Employer” means an entity that employs one or more individuals performing services for it within this state. For a

complete deﬁ nition of employer, see 26 MRSA § 1043.

“Dependent” means a dependent, as deﬁ ned by IRC § 152, who is under 19 years of age.

“Dependent health beneﬁ ts” means health beneﬁ ts and health insurance costs allowable as deductions to the employer

under IRC § 105, paid by the taxpayer on behalf of the taxpayer’s low-income employees for the beneﬁ t of the employees’

dependents.

“Health beneﬁ t plan” means a plan that includes comprehensive coverage for at least the following range of beneﬁ ts:

inpatient and outpatient hospital services; physicians’ surgical and medical services; laboratory and x-ray services; and well-

baby and well-child care, including age-appropriate immunizations. The plan must provide coverage that has an actuarial

value no less than 80% of the actuarial value of coverage that is provided to employees of the State of Maine. For purposes

of this paragraph, “actuarial value” means the expected cost of a beneﬁ t based on assumptions as to relevant variables

such as morbidity, mortality, persistency and interest. When comparing the actuarial value of one beneﬁ t or package of

beneﬁ ts to another, both actuarial values must be based on the same assumptions. The plan must also impose copayment

and deductible costs on the employee that do not exceed 10% of the actuarial value of all beneﬁ ts afforded by the plan and

makes the same or comparable coverage available for the beneﬁ t of the employee’s dependent children who are under 19

years of age.

“Low-income employee” means a Maine resident whose average weekly earnings from the employer do not exceed the

state’s average weekly wage as calculated by the Department of Labor.

In the case of pass-through entities (partnerships, LLCs, S corporations, trusts, etc.), the partners, members, shareholders,

beneﬁ ciaries or other owners are allowed a credit in proportion to their respective interest in these entities.

SPECIFIC LINE INSTRUCTIONS

Please enter the employer name and social security number (“SSN”) or employer identiﬁ cation number (“EIN”).

Line 1.

Enter the total number of low-income employees with dependent health beneﬁ ts provided by the

employer.

Line 3.

Enter the total amount paid by the employer to provide dependent health beneﬁ ts in 2011 for low-income

employees. See deﬁ nition of dependent health beneﬁ ts above.

Line 6.

Enter any tax credit amounts claimed in 2009 or 2010 but not used. This amount should come from your

2010 worksheet, line 11.

Lines 8 & 9.

The credit is limited to 50% of the Maine tax liability.

Line 11.

Enter the unused credit amount here. That portion of the unused credit not exceeding the 2-year carryover

period may be claimed on your Maine income tax return next year.

Rev. 2/12

Tax Credit For Dependent Health Benefits Paid Worksheet - 2011 Page 2

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