Health Care Tax Credit Update, IRS Outreach to Small Businesses
The Health Reform Law, the Patient Protection and Affordable Care Act, signed by President Obama on March 23, 2010, gives a tax credit to certain small employers that provide health coverage to their employees, effective for tax years beginning in 2010. As the tax filing extension deadlines near, the IRS and the Department of Health and Human Services (HHS) announce a new round of outreach to Small Businesses and Practitioners about the small business health care tax credit.
“As the filing deadlines approach, we want to make sure that small business owners don’t leave any money on the table,” said IRS Commissioner Doug Shulman. “Small businesses that offer health insurance should learn about this credit and claim it if they are eligible.” Learn more about the credit, items to show your tax preparer.
The small business health care tax credit was included in the Affordable Care Act enacted last year. Small employers that pay at least half of the premiums for employee health insurance coverage under a qualifying arrangement may be eligible for the small business health care tax credit. The credit is specifically targeted to help small businesses and tax-exempt organizations that primarily employ 25 or fewer workers with average income of $50,000 or less. Better health insurance is available, get a quote now.
Small employers face two important tax filing deadlines in coming weeks:
September 15. Corporations that file on a calendar year basis and requested an extension to file to September 15 can calculate the small employer health care credit on Form 8941 and claim it as part of the general business credit on Form 3800, which they would include with their corporate income tax return.
October 17. Sole proprietors who file Form 1040 and partners and S-corporation shareholders who report their income on Form 1040 and request an extension have until October 17 to complete their returns. They would also use Form 8941 to calculate the small employer health care credit and claim it as a general business credit on Form 3800, reflected on line 53 of Form 1040. If your former employees are taking a beating with COBRA and affecting your rates, read our blogs about getting them off your plan.
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As these 2010 deadlines approach and businesses begin planning for the end of 2011 and 2012, the IRS’s new outreach campaign will focus on:
The tax software industry to improve access to educational information and to help alert small employers and practitioners when taxpayers may be eligible for the credit.
Insurance agents, brokers and carriers who work with small businesses to help ensure that participants in the health insurance marketplace understand the features and benefits of the credit. The Department of Health and Human Services today sent an email to 2,000 agents and brokers alerting them to the credit for their small business clients.
The small business and tax practitioner community to provide additional webinars and educational opportunities about the credit.
Information will also be available through social media and other venues, including IRS YouTube videos in English, Spanish and American Sign Language. Targeted e-mails and tweets will be sent to the small business community and tax preparers.
The IRS’s new outreach effort will remind employers about the upcoming extension deadlines and will also provide details on other important information about the credit.
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