Why small business owners need to take advantage of health care
Small Business Health Care Credit
Many small business owners are not taking advantage of the health care credit. According to GAO only 170,000 small businesses claimed the credit. It is estimated that 1.4 to 4 million small business are eligible.
What is the credit?
It is a credit that reimburses the business owner for up to 35% of employer insurance payments paid. In 2010 through 2013 the maximum credit is 35%. In 2014 and 2015 the credit will increase to 50% for employers.
What does this mean?
If an employer spends $10,000 per year in health insurance premiums, the employer can get a tax credit up to $3,500 for that year which can be used to reduced taxes and sometimes refunded.
What are the requirements?
Employers must have fewer than 25 full time equivalent employees. The maximum credit is for employees with 10 employees or less.
The average wages paid must be less than $50,000.
How do I take the credit?
The credit is claimed on form 8941. You can amend your return to claim the credit for the last three years.