As business owners, we know how important it is for you to learn how the recently passed Health Care Reform bill will impact your business. Although much of this legislation is still undefined, Riviera Insurance Services LLC will continue to provide you with information and guidance on important parts of the bill such as the small business health care tax credit effective for 2010.
Under the health care bill passed in March 2010, tax credits will be granted to some small employers for a part of the health insurance premiums for which the employer pays. The purpose of this credit is to encourage employers to offer their employees health care coverage for the first time, and to encourage those who currently offer coverage, to continue to do so.
Effective 2010 through 2013, the IRS will provide a tax credit of up to 35% for small businesses and 25% for tax-exempt organizations that provide health insurance for their employees. Employers can claim this 2010 tax credit when they file their income taxes in 2011.
A small business is eligible for this tax credit if the employer:
- Employs 25 or fewer “full-time equivalent” employees (FTE)
- Pays average annual wages of less than $50,000 per FTE
- Contributes a uniform percentage of the premium cost of coverage which must not be less than 50%, based upon the premium rates for single coverage
In 2014, the tax credit for small businesses will increase to 50% and 35% for tax-exempt organizations. This tax credit is designed to help small businesses afford health care coverage, specifically those who employ low to medium income workers.
To see if your business qualifies for this tax credit, click on this link to view and follow the 3 Simple Steps.
To learn more about this tax credit, you can view Small Business Health Care Tax Credit: FAQ’s on the IRS website.
As we gather more information about the ongoing health care changes we will keep you informed. If you have questions regarding the changes, please feel free to contact your Riviera Insurance Services Benefits team, and we will be happy to provide more information and resources.
This content has been provided by Paychex, Inc. For more information, visit www.paychex.com