A number of small-business employers, who pay approximately half of their employees’ health insurance premiums under some qualifying arrangements, may also be eligible for tax credit for healthcare. The advantage of such a tax credit is that small-business owners will be empowered to offer healthcare insurance. It would also sustain those that are already offering the service and thus, maintain their coverage. Actually, the credit program was specifically aimed at helping small-business employers and other organizations that are tax-exempt.
Here is a list of key points that small-business employers ought to know so that they score big on tax credits for the year 2010:
• Natural disasters, such as Hurricane Irene and other recent natural disasters, had postponed some tax filing deadlines to October 31, 2011. Also postponed to a similar date, was tax payment. Therefore, qualifying businesses had adequate time to file Form 8941, which was for small-business employer healthcare credit and claimed tax relief on Form 3800, which is for general business credit.
• Employers and shareholders that use Form 1040 to report their incomes had to October 17 to completely file their returns -that is if they requested for an extension of deadline. They may also have made use of Form 8941 to calculate small-business employer health care credit and claim it on Form 3800, which is for general business credit.
• Any tax-exempt organization can also make use of Form 8941 to claim credit. This is done through Form 990-T Line 44f. This opportunity is only open to organizations that file tax returns on a yearly basis and have requested for deadline extension till November 15th.
• Small businesses that may have filed are eligible to claim their credit by filing an amended 2010 tax return. Corporations use form 1120X while sole proprietors use Form 1040X.
• Any businesses that may not be able to use credit in 2010 are still eligible to make claims in the future years. Also, the duration of claiming the credit has been extended till 2014, especially for small-business employers.
The maximum amount of credit for small -business employers is usually 35% of the premiums payable, while for tax-exempt employers, the figure is 25% of premiums payable. This is applicable for the years 2010 to 2013. By the start of the year 2014, the rate will rise to 50% of premiums payable by any eligible small-business employer and 35% of premiums paid by tax-exempt organizations.
More vital information on eligibility requirements and how to calculate credit claims is freely available on the Small Business Health Care Tax Credit for Small Employers page on the Internal Revenue Service’s website.