WASHINGTON — With business
tax-filing deadlines fast approaching, the Internal Revenue Service today
encouraged 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 page on IRS.gov is packed with
information and resources designed to help small employers see if they qualify
for the credit and then figure it correctly. These include a step-by-step guide
for determining eligibility, examples of typical tax savings under various
scenarios, answers to frequently-asked questions, a YouTube video and a
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:
15: Corporations that file on a calendar year basis can figure the credit
8941 and claim it
as part of the general business credit on Form
3800, both of which are attached to their corporate income tax
17: Individuals have until April 17 to complete and file their returns on Form
1040. This includes Sole proprietors, as well as people who
have business income reported to them on Schedules K-1—partners in
partnerships, S corporation shareholders and beneficiaries of estates and
trusts. They also attach Forms 8941 and 3800 to their return. The
resulting credit is entered on Form 1040 Line 53.
15: Tax-exempt organizations that file on a calendar year basis can use
Form 8941 and then claim the credit on Form
990-T, Line 44f.
Taxpayers needing more time to determine eligibility should
consider obtaining an automatic tax-filing extension, usually for six months.
4868 for individuals, Form
7004 and its instructions for businesses and Form
8868 for tax-exempt
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, individuals use Form
1040X and tax-exempt
organizations use Form 990-T.
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.
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Disclaimer: Every effort has been taken to provide the most accurate and honest analysis of the tax information provided in this blog. Please use your discretion before making any decisions based on the information provided. This blog is not intended to be a substitute for seeking professional tax advice based on your individual needs.