SB 635 — establishing a health reimbursement arrangement tax credit program and making an appropriation for improvements in the department of revenue administration's information management system.

SB 635-FN - AS INTRODUCEDAMENDED BY THE SENATE 03/05/2026 0832s SESSION 26-2214 07/06 SENATE BILL 635-FN AN ACT establishing a health reimbursement arrangement tax credit program.program and making an appropriation for improvements in the department of revenue administration's information management system.

Ways and Means ───────────────────────────────────────────────────────────────── AMENDED ANALYSIS This bill establishes a health reimbursement arrangement tax credit program.program and makes an appropriation for improvements in the department of revenue administration's information management system.

SB 635-FN - AS INTRODUCEDAMENDED BY THE SENATE 03/05/2026 0832s 26-2214 07/08 STATE OF NEW HAMPSHIRE In the Year of Our Lord Two Thousand Twenty-Six AN ACT establishing a health reimbursement arrangement tax credit program.program and making an appropriation for improvements in the department of revenue administration's information management system.

  CHAPTER 77-H HEALTH REIMBURSEMENT ARRANGEMENT TAX CREDIT 77-H:1 Definitions.

  I.

“Qualified “Covered taxpayer”employee” means an employer with more than one employee thatfor iswhom a corporation,qualified ataxpayer limitedmakes liability company, a partnership,qualified orcontribution. another entity that has any state tax liability under RSA 77-A or RSA 77-E and has adopted a health reimbursement arrangement, as described in Section 9831(d) of the Internal Revenue Code, in lieu of a traditional employer provided health insurance plan.

  II.

"Qualified“Department” contribution” means athe reimbursementdepartment anof employerrevenue providesof toadministration. an employee for eligible medical expenses, including premiums for an individual health insurance plan or a contribution made.

  IV.

“Covered  employee”"Qualified contribution” means ana employeereimbursement forby whom a qualified taxpayer makesto a qualified contribution.account for use in accordance with applicable federal laws and regulations.

  V.

“Qualified taxpayer” means an employer with fewer than 50 employees that is a corporation, a limited liability company, a partnership, or another entity that has any state tax liability under RSA 77-A or RSA 77-E.

I.  A qualified taxpayer may claim a credit against their tax due under RSA 77-A and RSA 77-E, in the manner described in RSA 77-H:3, for qualified contributions of $300 per covered employee per year for no more than 2 years, which shall be consecutive, if:

A(a) The qualified taxpayer bydid annot employercontribute to aan qualifiedemployer accountsponsored forgroup usehealth ininsurance accordanceplan with applicable federal laws and regulations may claim a credit against their state tax liability for qualifiedthe contributions,covered upemployee toin $400any inof the firstprevious year3 peryears; covered employee, if:

(a)and (b) The contribution to a qualified account in the benefit year for which the credit is claimed is not less than $300 more than the amount provided towardin the healthlast reimbursementbenefit arrangementyear isof equalan to,employer sponsored group health insurance program or greaterqualified than,account for the levelcovered ofemployee benefitsprior providedto the first year in which the previouscredit benefitwas year;claimed.

or (b) The amount the employer contributes toward the health reimbursement arrangement equals the same or exceeds amount contributed per covered individual toward the employer provided health insurance plan during the previous benefit year.

II.

The credit under this section shall decrease to $200 per covered employee in the second year.

SB 635-FN - AS INTRODUCED - Page 2 - III.

The credit under this section may not exceed $20,000 per qualifying taxpayer in the first year or $10,000 per qualifying taxpayer in the second year.

SB 635-FN - AS AMENDED BY THE SENATE - Page 2 - I.

There shall be allowed a health reimbursement arrangement tax credit applied to ana eligiblequalified businesstaxpayer, as set forth in RSA 77-H:277-H:2, for qualified contributions made during the taxable year, as follows:

  (a) To receive the credit provided under this chapter, a qualified taxpayer mustshall claimsubmit thean creditapplication on thea qualifiedform taxpayer’sto statebe taxprescribed returnby orthe returnscommissioner inand theshall mannerbe prescribedaccompanied by information or records required by the department.commissioner.

(b) TheApplications amountshall ofbe taxprocessed creditson granteda underfirst thiscome, chapterfirst mayserved notbasis, exceedup $10,000,000to inthe anyaggregate taxabletax year.credit amount allowed under this section.

(c)If Themultiple departmentapplications shallare recordreceived theon time of filing of each return claiming a credit under this chapter and approve the claimssame ifday, they otherwiseshall qualifybe forprocessed aat taxrandom. credit under this chapter in the chronological order in which the claims are filed in the state fiscal year.

(d)(c) TheOnce departmentawarded, maythe notcredit approvemay abe claimclaimed forby a tax credit after the datequalified ontaxpayer whichagainst thetax totaldue credits approved under thisRSA section77-E equalsat theany maximumtime amount allowable in athe particularmanner stateprescribed fiscalby year.the department.

(e)Any Theunused amount of the credit provided by this chapter that a qualified taxpayer uses during a particular taxable year may notbe exceedapplied theagainst stateRSA tax77-A. liability of the qualified taxpayer.

(f)For If the amountpurposes of athe credit determinedallowed under this77-A:5, chapterX, for a particular qualified taxpayer and a particular taxable year exceeds the qualifiedcredit taxpayer'sunder statethis taxsection liabilityshall forbe thatconsidered taxabletaxes year,paid. then the qualified taxpayer may carry the excess over to the immediately succeeding taxable years.

(d) The creditaggregate carryoveramount mayof nottax becredits usedawarded forunder anythis taxablechapter yearmay thatnot beginsexceed more$2,500,000 thanin 3any yearsstate afterfiscal theyear. date on which the donation from which the credit results is made.

The  amount(e) ofThe thedepartment creditmay carryovernot fromaward a taxabletax yearcredit shallafter be reduced to the extenttotal thatcredits theawarded carryoverunder isthis usedsection byequals the qualifiedmaximum taxpayeramount toallowable obtainin a creditparticular understate thisfiscal chapter for any subsequent taxable year.

(g)  A(f) The amount of the credit provided by this chapter that a qualified taxpayer isuses notduring entitleda toparticular ataxable carryyear backmay ornot refundexceed the state tax liability of anythe unusedqualified credit.taxpayer.

  (g) Any unused credit awarded under this chapter may be carried forward for not more than 3 succeeding taxable periods.

(h) A qualified taxpayer shall not be entitled to a carry-back or refund of any unused credit.

The commissioner of the department of revenue administration shall proposeadopt rules, pursuant to RSA 541-A, relative to implementing the administration of the health reimbursement arrangement tax credit program established under this chapter.

  3 New Paragraph;

  Amend RSA 77-A:5 by inserting after paragraph XVII the following new paragraph:

XVII-a.  XVIII.

 ThereThere shall be allowed a health reimbursement arrangement tax credit, as established in RSA 77-H, against taxes due under this chapter for any unused portion of credit that has not been applied to the taxes due under RSA 77-E.

SB 635-FN - AS INTRODUCED - Page 3 - 77-E:3-g  Health Reimbursement Arrangement Tax Credit.

SB 635-FN - AS AMENDED BY THE SENATE - Page 3 - 5  Applicability.Appropriation;