As the March 15 corporate tax filing deadline approaches, the California Chamber of Commerce is reminding small businesses to take advantage of the small business health care tax credit. The tax credit is part of the federal 2010 Affordable Care Act.
The credit is worth up to 35 percent of a small business's premium costs (25 percent for tax-exempt employers). In 2014, this rate increases to 50 percent (35 percent for tax-exempt employers).
California small businesses can review the Internal Revenue Service (IRS) guidelines to determine eligibility for the tax credit on the new business-oriented website,www.healthlawguideforbusiness.org. The website offers a “tax credit calculator” that helps employers estimate savings available under the law.
Qualifying for the Credit
To qualify, an employer must have fewer than the equivalent of 25 full-time workers (for example, an employer with fewer than 50 half-time workers may be eligible). A qualifying employer also must pay average annual wages below $50,000.
Tags: tax credit, health insurance, Small business, small business heath care tax credit, small employers, Employers, health care reform
Earlier, We blogged about how employers and the California Department of Veterans Affairs (CalVet) are working together to educate eligible employees about the federal and state benefits available to military veterans.
Tags: tax credit, veterans, federal tax credit, hire a hero, hiring veterans, state tax credit, employees, Employers, HRCalifornia, CalChamber
Small businesses should review IRS guidelines to determine eligibility for the small business health care tax credit. The tax credit is part of the 2010 Affordable Care Act.
According to the IRS, small employers that pay at least half of the premium for employee health insurance coverage may be eligible for the small business health care tax credit. Small tax-exempt organizations may also qualify.
The credit is worth up to 35 percent of a small business's premium costs (25 percent for tax-exempt employers). In 2014, this rate increases to 50 percent (35 percent for tax-exempt employers).
To qualify, an 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). A qualifying employer must also pay average annual wages below $50,000.
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.
Use this three step fact sheet from the IRS to determine if you qualify. Eligible small employers will use Form 8941 to calculate the credit.
More information is available from the IRS.
Tags: tax credit, health care, Small business, health care tax credit