New Tax Credit for 2010

Small employers have a new credit available to them for their 2010 income tax return.  The Small Business Health Care Tax Credit was designed to encourage small employers to offer health insurance coverage or maintain the existing coverage offered to employees.  The credit is generally 35% of premiums paid by the employer.  Tax-exempt entities may qualify for a 25% credit of premiums paid.

Small employers are defined as those that paid premiums which are not less than 50% of the total premium for each enrolled employee, had fewer than 25 full time equivalent employees for the tax year and paid average annual wages of less than $50,000 per full time equivalent employee.

Determination of full time employees, average wages per full time equivalent employee and qualifying health insurance plans are critical to calculating the correct amount of credit available.  Please contact us to help determine if you qualify as a small employer for this new credit.

/posted by Brenna Richardson Prater, CPA