A BILL TO BE ENTITLED
AN ACT to reinstate the child health insurance tax credit.
The General Assembly of North Carolina enacts:
SECTION 1.  G.S. 105‑151.27 is reenacted and reads as rewritten:
"§ 105‑151.27.  Credit for child health insurance.
(a)	Credit. – Subject to the limitations provided in this section, a taxpayer is allowed a credit against the tax imposed by this Division if the taxpayer paid a health insurance premium during the taxable year that provided insurance coverage for the taxpayer's dependent children. The amount of the credit is the amount provided in the table below that corresponds to the taxpayer's adjusted gross income, as a percentage of the applicable federal poverty level (FPL), as defined in G.S. 108A‑70.18, based on the taxpayer's family size.

AGI as % of FPL			Credit Amount
      0 – 225					$300
      Over 225					$100

(b)	Income Limitations. – To be eligible for the credit allowed under this section, the taxpayer's adjusted gross income (AGI), as calculated under the Code, must be less than the amount listed in the table below:

Filing Status		AGI        
Married, filing jointly	  $100,000      
Head of Household	80,000      
Single			60,000      
Married, filing separately	50,000. 

(c)	Credit Limitations. – The credit allowed by this section may not exceed the amount of health insurance premium the taxpayer paid during the taxable year that provided insurance coverage for the taxpayer's dependent children. A nonresident or part‑year resident who claims the credit allowed by this section shall reduce the amount of the credit by multiplying it by the fraction calculated under G.S. 105‑134.5(b) or (c), as appropriate. In order to claim a credit under this section, a taxpayer must provide any information required by the Secretary to establish the taxpayer's eligibility for the credit and the amount of the credit.
(d)	No Double Benefit. – If the taxpayer claimed a deduction for health insurance costs of self‑employed individuals under section 162(l) of the Code for the taxable year, the amount of credit otherwise allowed the taxpayer under this section is reduced by the applicable percentage provided in section 162(l) of the Code. If the taxpayer claimed a deduction for medical care expenses under section 213 of the Code for the taxable year, the taxpayer is not allowed a credit under this section. A taxpayer who claims the credit allowed by this section must provide any information required by the Secretary to demonstrate that the amount paid for premiums for which the credit is claimed was not excluded from the taxpayer's gross income for the taxable year.
	(f)	Definitions. – The following definitions apply in this section:
(1)	Comprehensive health insurance plan. – Any of the following plans, policies, or contracts that provide health benefits coverage for dependent children for inpatient and outpatient hospital services, physicians' surgical and medical services, and laboratory and X‑ray services: accident and health insurance policy or certificate; hospital or medical service corporation contract; HMO subscriber contract; plan provided by a MEWA or plan provided by another benefit arrangement, to the extent permitted by ERISA, and the North Carolina Teachers' and State Employees' Comprehensive Major Medical Plan established under Part 3 of Article 3 of Chapter 135 of the General Statutes. "Comprehensive health insurance plan " does not mean any plan implemented or administered through the Department of Health and Human Services.
(2)	Dependent child. – A child under the age of 19 for whom the taxpayer is allowed to deduct a personal exemption under section 151(c)(1)(B) of the Code for the taxable year.
(3)	Family size. – The number of individuals for whom the taxpayer is entitled to deduct a personal exemption under the Code for the taxable year.
(4)	Health insurance premium. – An amount paid by the taxpayer for insurance coverage of the taxpayer's dependent children under a private or employer‑sponsored comprehensive health insurance plan and an amount paid to purchase extended coverage under the Health Insurance Program for Children pursuant to G.S. 108A‑70.21. The term does not include, however, amounts deducted from or not included in the taxpayer's gross income for the taxable year, as calculated in subsection (d) of this section."
SECTION 2.  This act is effective for taxable years beginning on or after January 1, 2002.