Small biz tax credits for healthcare
Friday, March 12, 2010
The following article from The Hill outlines new guidance from
the administration regarding small business tax credits for
healthcare.
Broader eligibility announced for healthcare tax
credit
By Julian Pecquet - 12/02/10
The Obama administration on Thursday released new guidance to
help small businesses claim the tax credits they're eligible for
under the healthcare reform law.
According to the administration, the new guidance "addresses
small business questions about which firms qualify by clarifying
that a broad range of employers meet the eligibility requirements,"
including:
- Employers that pay for a portion of their employees' healthcare
costs through a broad range of contribution arrangements. This
includes firms that pay more to help older workers cover the higher
premiums and firms that allow employees a choice of coverage;
- Religious institutions that provide coverage through
denominational organizations. While the credit is for employers
that fully insure in most cases, denominational organizations that
self-insure their coverage can qualify for the credit; and
- Certain small employers that cover their workers through
multi-employer healthcare and welfare plans. This is true as so
long as 100 percent of the cost of coverage for all employees
covered by the multi-employer plan is paid from employer
contributions and not by employees.
In addition, the guidance includes a one-page form
(Form 8941) and instructions
to help small businesses claim the credit when they file their 2010
taxes.
The Democrats' law created a tax credit that could save small
businesses as much as $40 billion by 2019, according to the
Congressional Budget Office. Both for-profit and nonprofit
organizations may qualify for the tax credit, but not the
self-employed.
Eligible firms will get a 35 percent tax credit for their
healthcare costs. To qualify for the full credit, businesses must
have fewer than 25 employees, pay average annual wages below
$50,000, and pay for most of their employees' health coverage.
Source:
http://thehill.com/blogs/healthwatch/health-reform-implementation/131653-new-healthcare-reform-tax-credit-information-released
You can also learn more on the IRS site at: http://www.irs.gov/newsroom/article/0,,id=231928,00.html
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