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(1) Montana law provides two different tax credits for health insurance purchased by employers for employees. A program administered by the commissioner of insurance, and referred to as the Insure Montana Credit, provides incentives, including a refundable tax credit provided in 15-30-2368 and 33-22-2006, MCA, for eligible, prequalified small employers. The rules related to that program are located in ARM Title 6, chapter 6, subchapter 52. No tax form is required to claim the preauthorized, refundable credit. Rather, the prequalified employers claim it as a line item on their individual income or corporate income tax return or, if they are taxed as an S corporation or partnership, they report it as a line item on their information returns and the pass-through entity owners claim their part as a line item on their individual income tax or corporate income tax returns, including a copy of the certificate issued by the Montana State Auditor's Office, verifying the amount of the credit.

(2) The rules in this subchapter apply to a second credit, referred to as the Health Insurance for Uninsured Montanans Credit, provided in 15-30-2367 and 15-31-132, MCA. The credit under 15-30-2367, MCA, against individual income tax, and 15-31-132, MCA, against corporate income tax, is subject to specific conditions and limitations listed in 15-31-132, MCA. It is not refundable, and any unused credit amount may not be carried over to another tax year. An employer cannot claim both the small employer credit provided in Title 33, chapter 22 and the Title 15, chapter 30 and 31, MCA tax credit.

(3) The credit may not be claimed for any insurance policy that does not meet the minimum requirements of the Small Employer Health Insurance Availability Act imposed in Title 33, chapter 22, part 18, MCA.

(4) The credit may not be claimed for a period of more than 36 consecutive months that begins with the first month for which the credit is claimed. The credit may be claimed for any month qualifying insurance is provided during the 36-month period even if the employer either stops paying for insurance or does not claim the credit for other months. For example, company XYZ provides qualifying insurance for its employees from January 1, 2009, until December 31, 2009, but then stops paying in 2010. The employer is eligible to claim the credit through 2011 if it starts covering its employees again in 2011.

(5) For ten years after the last payment within the 35 months following the first month for which the credit is claimed, the employer or the employer's successor is ineligible to claim the credit. The 10-year period of ineligibility expires sooner if the credit is not claimed for the full 36-month period. For example, company ABC provides qualifying insurance for its employees from January 1, 2009 until December 31, 2010. The employer, or its successor, is eligible to claim the credit again January 1, 2021.

(6) If the employer is an S corporation, the credit may be claimed by its shareholders based upon their pro rata share of ownership in the corporation.

(7) If the employer is a partnership, the credit must be attributed to the partners in the same proportion used to report the partnership's income or loss for Montana income tax purposes.

(8) Form HI, Health Insurance for Uninsured Montanans Credit, must be completed for the year the credit is claimed and attached to the appropriate tax return.

(9) A taxpayer who files a tax return electronically must complete Form HI and retain the form and submit it to the department upon request.

(10) The Health Insurance for Uninsured Montanans Credit is referred to in 15-31-132 and 15-30-2367, MCA, as the credit for providing disability insurance for employees. Disability insurance is defined in 33-1-207, MCA.

History: 15-31-501, MCA; IMP, 15-30-2367, 15-30-2368, 15-31-132, 33-1-207, MCA; NEW, 1992 MAR p. 1764, Eff. 8/14/92; AMD and TRANS, from ARM 42.23.503, 2004 MAR p. 1965, Eff. 8/20/04; AMD, 2010 MAR p. 1209, Eff. 5/14/10; AMD, 2013 MAR p. 216, Eff. 2/15/13; AMD, 2014 MAR p. 2178, Eff. 9/19/14.

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