Sec. 1. 36 MRSA §5219-O, as amended by PL 2001, c. 396, §39, is further amended to read:

§5219-O. Credit for health benefits paid

1. Credit allowed. A taxpayer constituting an employing unit that employs 10 or fewer than 5 employees is allowed a credit to be computed as provided in this section against the tax imposed by this Part, subject to the limitations contained in subsections 3 and 4. The credit equals the lesser of 20% of dependent health benefits paid with respect to the taxpayer's low-income employees or dependents of employees under a health benefit plan during the taxable year for which the credit is allowed or $125 $1,000 per low-income employee or dependent of an employee with dependent health benefits coverage. A taxpayer who received a credit under this section in the preceding year and whose number of low-income employees is 5 or more than 10 may continue to receive the credit for 2 years after the last year in which the number of employees was 10 or fewer than 5.

2. Definitions. As used in this section, unless the context otherwise indicates, the following terms have the following meanings.

A. "Dependent" means a dependent, as defined by Section 152 of the Code, who is under 19 years of age.

B. "Dependent health Health benefits" means health benefits and health insurance costs allowable as deductions to the employer under Section 105 of the Code, paid by the taxpayer on behalf of the taxpayer's low- income employees for the benefit of the employees or the employees' dependents.

C. "Employing unit" has the same meaning as in Title 26, section 1043.

D. "Health benefit plan" means a plan that:

(1) Includes comprehensive coverage for at least the following range of benefits:

(a) Inpatient and outpatient hospital services;

(b) Physicians' surgical and medical services;

(c) Laboratory and x-ray services; and