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IRS Small Business Health Care Tax Credit Creates Opportunities
The new Internal Revenue Service
(IRS) Small Business Health Care Tax Credit helps small businesses and
small tax-exempt organizations afford the cost of covering their
employees' health care benefits. See how the tax credit may enable your
eligible clients to expand their program to include specialty benefits
and potentially offer a richer plan to their employees.
Eligibility
Rules
For-profit and tax-exempt employers may qualify.
However, all three of the following criteria must be met:- The employer must cover at
least 50 percent of health care coverage costs for workers based on the
employee-only (single) rate.
- The employer must have no
more than the equivalent of 25 full-time workers (not counting owners or
family members).
- Employees' average annual
wages (not counting owners or family members) must be below $50,000.
Credit Amount - The maximum credit is worth
up to 35 percent of a company's premium costs in 2010 (25 percent for
tax-exempt employers).
- Note that the rate will
increase to 50 percent on Jan. 1, 2014 (35 percent for tax-exempt
employers).
- The credit gradually phases
out for employers with average wages between $25,000 and $50,000, and
for employers with the equivalent of between 10 and 25 full-time
workers.
Employer Notification/Support Materials
The IRS is informing potentially eligible small business groups about this tax credit. Visit the IRS Site for additional support materials, including a video and frequently asked questions.
provided by: United Healthcare Services, Inc.
published: 5/192010
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