If you are a small employer with fewer than 25 full-time equivalent employees that earn an average wage of less than $50,000 a year and you pay at least half of employee health insurance premiums…then there is a tax credit that may put money in your pocket.

The Small Business Health Care Tax Credit is specifically targeted to help small businesses and tax-exempt organizations. The credit can enable small businesses and small tax-exempt organizations to offer health insurance coverage for the first time. It also helps those already offering health insurance coverage to maintain the coverage they already have.

Here is what small employers need to know so they don't miss out on the credit for tax year 2011:

  • Qualifying businesses calculate the small business health care credit on Form 8941, Credit for Small Employer Health Insurance Premiums, and claim it as part of the general business credit on Form 3800, General Business Credit, which they would include with their tax return.
  • Tax-exempt organizations can use Form 8941 to calculate the credit and then claim the credit on Form 990-T, Exempt Organization Business Income Tax Return, Line 44f.
  • Businesses that couldn't use the credit in 2011 may be eligible to claim it in future years. Eligible small employers can claim the credit for 2010 through 2013 and for two additional years beginning in 2014.

For tax years 2010 to 2013, the maximum credit for eligible small business employers is 35 percent of premiums paid and for eligible tax-exempt employers the maximum credit is 25 percent of premiums paid. Beginning in 2014, the maximum credit will go up to 50 percent of qualifying premiums paid by eligible small business employers and 35 percent of qualifying premiums paid by eligible tax-exempt organizations.

Additional information about eligibility requirements and calculating the credit can be found on the Small Business Health Care Tax Credit for Small Employers page of IRS.gov.

Save over $10 by purchasing your business and individual software as a TaxACT Home & Business Bundle. For $54.95, your Bundle includes one federal business edition (1065, 1120S or 1120), Deluxe (1040), State (1040), one federal business e-file, and one federal 1040 e-file. Order a TaxACT Home & Business Bundle now.

YouTube Video:

  • Small Business Health Care Tax Credit | English
August 2015
S M T W T F S
1
2 3 4 5 6 7 8
9 10 11 12 13 14 15
16 17 18 19 20 21 22
23 24 25 26 27 28 29
30 31

Upcoming Tax Dates

August 10 Employees who work for tips
If you received $20 or more in tips during July, report them to your employer - Details

August 10 Social security, Medicare, and withheld income tax
File Form 941 for the second quarter of 2015. This due date applies only if you deposited the tax for the quarter timely, properly, and in full.

August 12 Communications and air transportation taxes under the alternative method.
Deposit the tax included in amounts billed or tickets sold during the first 15 days of July.

August 14 Regular method taxes
Deposit the tax for the last 16 days of July.

August 17 Social security, Medicare, and withheld income tax
If the monthly deposit rule applies, deposit the tax for payments in July.

August 17 Nonpayroll withholding
If the monthly deposit rule applies, deposit the tax for payments in July.

August 26 Communications and air transportation taxes under the alternative method.
Deposit the tax included in amounts billed or tickets sold during the last 16 days of July.

August 28 Regular method taxes
Deposit the tax for the first 15 days of August.

August 31 Heavy highway vehicle use tax
File Form 2290 and pay the tax for vehicles first used in July.

August 31 Wagering tax
File Form 730 and pay the tax on wagers accepted during July.

View More Tax Dates