Bill Text: NJ A2500 | 2012-2013 | Regular Session | Introduced
Bill Title: Provides gross income tax deduction for health care plan costs.
Spectrum: Partisan Bill (Democrat 2-0)
Status: (Introduced - Dead) 2012-02-21 - Introduced, Referred to Assembly Appropriations Committee [A2500 Detail]
Download: New_Jersey-2012-A2500-Introduced.html
Sponsored by:
Assemblyman VINCENT PRIETO
District 32 (Bergen and Hudson)
SYNOPSIS
Provides gross income tax deduction for health care plan costs.
CURRENT VERSION OF TEXT
As introduced.
An Act allowing a gross income tax deduction for certain health care plan costs, amending N.J.S.54A:3-3 and supplementing chapter 3 of Title 54A of the New Jersey Statutes.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. N.J.S.54A:3-3 is amended to read as follows:
54A:3-3. Medical expenses. (a) Each taxpayer shall be allowed to deduct from the taxpayer's gross income medical expenses for the taxpayer, the taxpayer's spouse, and the taxpayer's dependents with respect to such expenses that were paid during the taxable year and to the extent that such medical expenses exceed 2% of the taxpayer's gross income. In the case of a nonresident, gross income shall mean gross income which such nonresident would have reported if the taxpayer had been subject to tax during the entire taxable year as a resident.
(b) Special Rule for Decedents.
(1) Treatment of expenses paid after death. Expenses for the medical care of the taxpayer which are paid out of the taxpayer's estate during the one-year period beginning with the day after the day of the death shall be treated as paid by the taxpayer at the time incurred.
(2) Limitation. Paragraph (1) shall not apply if the amount paid is not allowable as a deduction in computing medical expense deductions for federal income tax purposes.
(c) Disallowance of amounts allowed for other purposes.
(1) Any expenses allowed as a deduction of expenses for household and dependent care services necessary for gainful employment shall not be allowed as an expense paid for medical care for purposes of this section.
(2) Any amounts paid or distributed out of a medical savings account that are excluded from gross income pursuant to section 5 of P.L.1997, c.414 (C.54A:6-27) shall not be allowed as an expense paid for medical care for purposes of this section.
(3) Any amounts allowed as a deduction for the health insurance costs of the self-employed pursuant to section 1 of P.L.1999, c.222 (C.54A:3-5) shall not be allowed as an expense paid for medical care for purposes of this section.
(4) Any amounts allowed as a deduction for coverage under a health plan pursuant to section 2 of P.L. , c. (C. )(pending before the Legislature as this bill) shall not be allowed as an expense paid for medical care for purposes of this section.
(cf: P.L.1999, c.222, s.2)
2. (New section) Each taxpayer shall be allowed to deduct from the taxpayer's gross income amounts paid during the taxable year for the coverage of the taxpayer, the taxpayer's spouse and dependents under a health care plan, including amounts paid as the premium or a portion of the premium on a health insurance policy and contributions to a trust or fund which provides health benefits directly or through insurance. "Health care plan" means a plan or program that provides payment for hospitalization, physician and surgical fees, and other medical or dental expenses.
3. This act shall take effect January 1 next following enactment and apply to taxable years beginning on or after that date.
STATEMENT
This bill allows gross income tax payers to deduct from otherwise taxable gross income their cost or share of premiums and contributions made to a health care plan.
Currently, a taxpayer may deduct, pursuant to N.J.S.54A:3-3, the cost of coverage under a health care plan to the extent that the cost of coverage, together with other medical costs, exceeds 2% of the taxpayer's gross income. That means that only a portion of the costs of a taxpayer's coverage may be deductible.
This bill provides a deduction for 100% of the costs of coverage for the taxpayer and the taxpayer's spouse and dependents in all cases.
