IRS encourages small businesses to check out health care tax creditWith business tax-filing deadlines fast approaching, the Internal Revenue Service is encouraging small employers that provide health insurance coverage to their employees to check out the small business health care tax credit and then claim it if they qualify.
With business tax-filing deadlines fast approaching, the Internal Revenue Service is encouraging small employers that provide health insurance coverage to their employees to check out the small business health care tax credit and then claim it if they qualify.
The recently-revamped Small Business Health Care Tax Credit
The small business health care tax credit was included in the Affordable Care Act enacted two years ago. Small employers that pay at least half of the premiums for employee health insurance coverage under a qualifying arrangement may be eligible for this credit. The credit is specifically targeted to help small businesses and tax-exempt organizations provide health insurance for their employees.
Depending upon how they are structured, eligible small employers are likely subject to one of the following three tax-filing deadlines, which fall in coming weeks:
· March 15: Corporations that file on a calendar year basis can figure the credit on Form 8941
· April 17: Individuals have until April 17 to complete and file their returns on Form 1040
· May 15: Tax-exempt organizations that file on a calendar year basis can use Form 8941 and then claim the credit on Form 990-T
Taxpayers needing more time to determine eligibility should consider obtaining an automatic tax-filing extension, usually for six months. See Form 4868
Businesses that have already filed and later find that they qualified in 2010 or 2011 can still claim the credit by filing an amended return for one or both years. Corporations use Form 1120X
Some businesses and tax-exempt organizations that already locked into health insurance plan structures and contributions may not have had the opportunity to make any needed adjustments to qualify for the credit for 2010 or 2011. These employers can still make the necessary changes to their health insurance plans so they qualify to claim the credit on 2012 returns or in years beyond. Eligible small employers can claim the credit for 2010 through 2013 and for two additional years beginning in 2014.
Additional information about eligibility requirements and figuring the credit can be found on IRS.gov.