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Small Employers can Claim New Health Care Tax Credit
New Health Care Tax Credit for Small Business
December 3, 2010
The small business health care tax credit was included in the Affordable Care Act enacted in March 2010, and is designed to encourage small businesses and small tax-exempt organizations to offer health insurance coverage to their employees, whether for the first time or to maintain coverage they already offer.
Yesterday the IRS released final guidance on how to claim the new small business health care tax credit for the 2010 tax year. The one page form and instructions can be found on the IRS website.
The new guidance answers questions about which firms qualify for the credit, and makes it clear that a broad range of businesses will meet the eligibility requirements. In general, the credit is available to small employers that pay at least half of the premiums for single health insurance coverage for their employees. It is targeted to help small businesses that primarily employ moderate and lower income workers.
The credit can be claimed for 2010 through 2013, and for any two years after that. The maximum credit is 35% of premiums paid by eligible small businesses, and 25% of premiums paid by eligible tax-exempt organizations.
This is a summary of key items about the credit and is not a complete list of all provisions. Please contact our tax professionals if you have questions about this, or any other tax issues. Call us at 877.517.6872. |
