Small Business Health Care Tax Credit
Small Business Health Care Tax Credit
Small Business Health Care Tax Credit
The Small Business Health Care Tax Credit is designed to help small businesses and small tax- exempt organizations to afford the cost of covering their employees health insurance.
Simple Eligibility Rules are as follows:
- Providing health care coverage. A qualifying employer must cover at least 50 percent of the cost of health care coverage for some of its workers based on the single rate.
- Firm size. A qualifying employer must have less than the equivalent of 25 full-time workers (for example, an employer with fewer than 50 half-time workers may be eligible).
- Average annual wage. A qualifying employer must pay average annual wages below $50,000.
- Both taxable (for profit) and tax-exempt firms qualify.
Follow this link and use the Worksheet to help determine if you qualify.
http://www.irs.gov/pub/irs-utl/3_simple_steps.pdf
The Amount of Credit Available:
- Maximum Amount. The credit is worth up to 35 percent of a small business' premium costs in 2010. On Jan. 1, 2014, this rate increases to 50 percent (35 percent for tax-exempt employers).
- Phase-out. The credit phases out gradually for firms with average wages between $25,000 and $50,000 and for firms with the equivalent of between 10 and 25 full-time workers.
New guidance has been recently issued to make it easier for small businesses to determine whether they are eligible for the new health care tax credit under the Affordable Care Act and how large a credit they will receive.
