 Tax credit helps small employers provide health insurance coverage
Included in the health care reform legislation, the "Patient Protection and Affordable Care Act," approved by Congress and signed by President Obama on March 23, is a new tax credit designed to encourage small employers to offer health insurance coverage for the first time or maintain coverage they already have. In general, the credit is available to small employers that pay at least half the cost of single coverage for their employees.
The maximum credit is 35 percent of premiums paid in 2010 by eligible small business employers and 25 percent of premiums paid by eligible employers that are tax-exempt organizations. In 2014, this maximum credit increases to 50 percent of premiums paid by eligible small business employers and 35 percent of premiums paid by eligible employers that are tax-exempt organizations.
The credit is specifically targeted to help small businesses and tax-exempt organizations that primarily employ low and moderate income workers. It is generally available to employers that have fewer than 25 full-time equivalent (FTE) employees paying wages averaging less than $50,000 per employee per year. Because the eligibility formula is based in part on the number of FTEs, not the number of employees, many businesses will qualify even if they employ more than 25 individual workers.
Be sure to check with your accounting professional for details on claiming this credit!
Hiring Incentives to Restore Employment Act
On March 18, 2010, President Obama signed into law the "Hiring Incentives to Restore Employment (HIRE) Act". The Act provides tax benefits for businesses to hire and retain new employees. HIRE is designed to encourage businesses to increase their workforces through two tax breaks: payroll tax savings and an additional one-year tax credit on new hires. Only qualified employers may take advantage of the tax breaks. These include private employers as well as public higher education; however, federal, state, and local government employers are not included.
IRS publishes Form W-11 for use in conjunction with HIRE Act
The Internal Revenue Service (IRS) released a new form that will help employers claim the special payroll tax exemption that applies to many newly-hired workers during 2010, created by the "Hiring Incentives to Restore Employment (HIRE) Act" signed by President Obama on March 18.
The new law requires that employers get a statement from each eligible new hire, certifying under penalty of perjury, that he or she was unemployed during the 60 days before beginning work or, alternatively, worked less than a total of 40 hours for anyone during that 60-day period. Employers can use Form W-11 to meet this requirement.
Beginning with the 2nd Quarter, 2010, eligible employers will use Form 941, Employers Quarterly Federal Tax Return (currently being revised to accomodate this change) to claim the payroll tax credit. Though employers need this certification (Form W-11) to claim both the payroll tax exemption and the new hire retention credit, they do not file these statements with the IRS. Instead, they must retain them along with other payroll and income tax records (Prospera, 2010).
|
RGL Pipeline 
