This bill establishes a new tax credit program for health reimbursement arrangements (HRAs) aimed at qualified taxpayers, which include employers with more than one employee that have adopted an HRA instead of traditional health insurance. The program allows these employers to claim a tax credit against their state tax liability for qualified contributions made to HRAs, with a maximum credit of $400 per covered employee in the first year, decreasing to $200 in the second year. The total credits granted under this program cannot exceed $10 million in any taxable year. The bill also includes provisions for the carryover of unused credits for up to three years and specifies that the credit can be applied against both the Business Profits Tax and the Business Enterprise Tax.

To implement this program, the bill introduces new legal language into existing tax laws, specifically amending RSA 77-A and RSA 77-E to include the health reimbursement arrangement tax credit. It also outlines eligibility criteria for qualified taxpayers and the process for claiming the credit. The bill is set to take effect on July 1, 2026, and will apply to taxable periods ending on or after December 31, 2027. The Department of Revenue Administration is tasked with proposing rules for the administration of the program, and the fiscal impact is estimated to potentially decrease state revenue by up to $10 million annually, although the exact impact remains indeterminable.

Statutes affected:
Introduced: 77-A:5
SB635 text: 77-A:5