How the Healthcare Tax Credit Can Benefit Your Business
Some businesses and tax-exempt organizations may qualify for the new health care tax credit. This credit is available to a small business employer that pays at least half of the premiums associated with providing single health insurance coverage to employees. Consider your qualifications.
What You Need to Know
If you are a small business owner, before you file your income tax for this year, consider what this new tax credit can do for you. You may be able to see an impressive cut in your taxes by utilizing it.
- You may be able to claim this credit for the tax year 2010, and through tax years 2013, and then for any two years after that.
- From 2010 through 2013, this health care credit may yield the business a maximum credit of 35 percent of the premiums that the business paid for employees.
- In 2014, the maximum credit will jump to 50 percent of the premiums paid by business owners.
- In order to qualify, your business must have ten or fewer full time employees. You must pay those employees an annual average wage of $25,000 or less to qualify for the credit.
Keep in mind that the Affordable Care Act now requires all employers to report the actual value of the health insurance paid to cover employees on the employee’s annual W-2 documentation. This rule applies for tax years starting in 2011. If your business needs more time to implement these changes, it can file an extension request with the IRS. If your business does not qualify for this tax deduction, there may be other small business tax deductions it may qualify for in nonetheless.