The Health Insurance Premium Tax Credit was established as a tax credit against the premium tax liability incurred by a health care insurer for insuring individuals and small businesses who were not previously covered by health insurance.

The Health Insurance Premium Tax Credit was established September 21, 2006 as a tax credit against the health insurance premium tax liability incurred by a health insurance carrier for insuring individuals and small businesses who were not previously covered by health insurance. This document contains the implementation procedures adopted by the Arizona Department of Revenue (ADOR) to administer this legislation.

1. Individuals and small businesses wanting to apply for a Certificate of Eligibility can obtain an application from ADOR. Applications and instructions are available on the website (www.azdor.gov under the Tax Credits link).
2. For an individual to qualify, the applicant must: (1) earn less than 250% of the federal poverty level, (2) be a legal Arizona resident and a U.S. citizen or a legal resident alien, (3) not have been covered by a health insurance policy for at least 6 consecutive months prior to applying for a Certificate, and (4) not be enrolled in the Arizona Health Care Cost Containment System (AHCCCS), Medicare or any other government health insurance program. The 2009 federal poverty guidelines are as follows:
    

   Family Size	Federal Poverty Guideline Gross Yearly Income	Maximum Income to be Eligible for Certificate
   1	$10,830	$27,074
   2	$14,570	$36,424
   3	$18,310	$45,774
   4	$22,050	$55,124
   5	$25,790	$64,474
   6	$29,530	$73,824
   7	$33,270	$83,174
   8	$37,010	$92,524
   Over 8, add per child	+$3,740	+$9,349

3. For a small business to qualify, the applicant must: (1) have been in existence in Arizona for at least one year, (2) not provided health insurance to its employees for at least 6 consecutive months prior to application, and (3) had at least 2 but no more than 25 employees (total full-time or part-time employees whether eligible for benefits or not) during the most recent calendar year.
4. The amount of the Certificate of Eligibility is based on $1,000 for single coverage, $3,000 for family coverage ($500 per dependent child if an individual applicant enrolls only their dependent child) OR 50% of the annual health insurance premium, whichever is less. The final credit amount will be determined by the actual enrollment at commencement of coverage but cannot exceed the amount indicated on the Certificate of Eligibility.
5. After reviewing the application, ADOR will issue a Certificate of Eligibility to a qualified individual or small business on a first come, first served basis unless the $5 million credit maximum per calendar year has been reached. Applications must be mailed to the address listed on the application. 
6. If there is insufficient money under the $5 million credit limit, ADOR will notify the qualified applicant they have been placed on a waiting list. When money becomes available, a Certificate of Eligibility will be issued. A Certificate of Eligibility must be issued prior to obtaining health insurance coverage in order to remain eligible to participate in the program.
7. Health insurance must be obtained within 90 days from the date the Certificate of Eligibility was issued or the Certificate will expire. Regardless of whether an application for health care coverage is in process, the Certificate will expire if a health insurance company has not approved the application and issued health care coverage within 90 days. The 90 day time period to obtain health insurance cannot be extended and the applicant is not eligible to receive a second Certificate of Eligibility.
8. The health insurance company must notify ADOR by the 15^th day of the month following commencement of health insurance coverage and the amount of premium tax credit they intend to claim.
9. Based on the actual number of employees enrolled per the Notification of Health Insurance Coverage, the amount applied against the $5 million cap will be adjusted as the coverage ultimately acquired may be fewer than the amount originally reserved.
10. Selecting a different health insurance company can only be done on the effective date of the renewal as the certificate cannot be transferred mid-year to another carrier.
11. If notification is not received from the insurer by the 15^th day of the month after commencement of coverage, ADOR will consider the Certificate invalid and release the amount reserved for new applicants. ADOR will allow 170 days from the date on the Certificate of Eligibility to declare that the Certificate is invalid.
12. Sixty days before end of the 12 month enrollment, ADOR will contact the individual or small business to determine if they continue to meet the eligibility requirements. If they continue to qualify, ADOR will issue a renewal Certificate for year two or year three. Individuals and small businesses can participate in the program for a maximum of three years. 
13. If circumstances for the small business applicant have changed, meaning more employees are to be insured in the new calendar year, ADOR will increase the amount of the renewal Certificate for year two or year three IF THERE IS SUFFICIENT MONEY AVAILABLE UNDER THE $5 MILLION CREDIT LIMIT TO ACCOMMODATE THE INCREASE.