Do you provide health insurance to your employees? You may be eligible for a tax credit!
The Small Business Health Care Tax Credit may help your organization by allowing a credit for the cost of your employee’s health insurance.
Eligibility Rules:
- You cover at least 50 percent of the cost of health care coverage for some of your workers.
- You have less than the equivalent of 25 full-time workers (for example, you may be eligible if you have 50 or less half-time employees).
- You pay average annual wages of less than $50,000 per full-time equivalent employee.
Amount of Credit:
- The credit is worth up to 35 percent of your insurance premium costs in 2010. The credit increases to 50 percent in 2014.
- The credit phases out gradually if you have average wages between $25,000 and $50,000 and you have the equivalent of between 10 and 25 full-time workers.
- The amount of an employer’s premium payments included in the calculation is capped by the average premium for the small group market for the state in which coverage is offered.
This Can Be a Significant Tax Credit!
For example, assume a qualified employer has 9 full-time equivalent employees (FTE) with average annual wages of $23,000 per FTE. The employer pays $72,000 in health care premiums for those employees (which does not exceed the average premium for the small group market in the employer’s state) and otherwise meets the requirements for the credit. The 2010 credit for this employer equals $25,200!
We Can Assist You in Calculating the Tax Credit
We offer a full range of tax services at BMG. As part of preparing your 2010 tax returns, we will assist you in calculating your FTEs and average annual wages per FTE. We will ensure that you get the full tax savings you may be entitled to from the Small Business Health Care Tax Credit. Simply give us a call at 402-483-7781 or email us at info@bmgcpas.com.
We welcome the opportunity to help you grow your business.