REPORT TITLE:
Long-Term Ins. Income Tax 

DESCRIPTION:
Establishes a State income tax credit equal to 50 per cent of
premium costs paid, up to a maximum of $1,000 per taxable year,
during the taxable year for a qualified long-term care insurance
contract as defined in section 7702B of the Internal Revenue
Code. (SD2)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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THE SENATE                              S.B. NO.           S.D. 2
TWENTIETH LEGISLATURE, 1999                                
STATE OF HAWAII                                            
                                                             
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                   A  BILL  FOR  AN  ACT


RELATING TO INCOME TAXATION.



BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 1      SECTION 1.  Chapter 235, Hawaii Revised Statutes, is amended
 
 2 by adding a new section to be appropriately designated and to
 
 3 read as follows:
 
 4      "235-     Long-term care insurance tax credit.  (a)  Each
 
 5 resident individual taxpayer who files an income tax return for a
 
 6 taxable year, and who is not claimed or is not otherwise eligible
 
 7 to be claimed as a dependent by another taxpayer for Hawaii state
 
 8 income tax purposes, may claim a long-term care insurance tax
 
 9 credit against the resident taxpayer's income tax liability for
 
10 the taxable year for which the income tax return is being filed.
 
11 The tax credit shall be in an amount equal to fifty per cent of
 
12 the premium costs paid by the taxpayer during the taxable year
 
13 for a qualified long-term care insurance contract as defined in
 
14 section 7702B of the Internal Revenue Code that covers the
 
15 taxpayer, a dependent as defined in section 152 of the Internal
 
16 Revenue Code, the taxpayer's spouse, or the taxpayer's parent.
 
17 The amount of the tax credit shall not exceed $1,000 in any
 
18 taxable year.
 
19      (b)  If the tax credit claimed by the taxpayer under this
 
20 section exceeds the amount of the income tax payments due from
 

 
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 1 the taxpayer, the excess of credit over payments due shall be
 
 2 refunded to the taxpayer; provided that the tax credit properly
 
 3 claimed by a taxpayer who has no income tax liability shall be
 
 4 paid to the taxpayer; and provided that no refunds or payments on
 
 5 account of the tax credit allowed by this section shall be made
 
 6 for amounts less than $1.
 
 7      (c)  The director of taxation shall prepare any forms that
 
 8 may be necessary to claim a credit under this section, may
 
 9 require proof of the claim for the tax credit, and may adopt
 
10 rules pursuant to chapter 91.
 
11      (d)  All of the provisions relating to assessments and
 
12 refunds under this chapter and under section 231-23(c)(1) shall
 
13 apply to the tax credit under this section.
 
14      (e)  Claims for the tax credit under this section, including
 
15 any amended claims, shall be filed on or before the end of the
 
16 twelfth month following the taxable year for which the credit may
 
17 be claimed."
 
18      SECTION 2.  New statutory material is underscored.
 
19      SECTION 3.  This Act, upon its approval, shall apply to
 
20 taxable years beginning after December 31, 1998.