The new IRS Small Business Healthcare Tax Credit helps businesses and small tax exempt organizations afford the cost of covering their employees’ healthcare benefits. If you already provide your staff healthcare benefits, you may qualify for the 2010 tax credit. If not, because you can get both a deduction and a tax credit you may now be able to provide Healthcare to your employees at a reasonable premium.
You should seek advice from a CPA, but here are a few things to consider in calculating how this credit could affect your business.
- To qualify for a credit you must have no more than 25 full time employees. To determine the total number of employees (not counting owners or family) add together the number of f/t and the number of f/t equivalents for part-time employees (divide the annual total hours worked for part-time employees by 2,080)
- Your average annual wages must be less than $50,000 and you will need to pay at least 50% of the premiums to qualify for the tax credit. If you do not cover your employees now, the 2010 tax credit maybe make this the year to start. The credit allows you to both deduct your premium contribution as an expense and receive a credit that reduces taxes due. For example if you qualify for the credit and you pay $50,000 for healthcare premiums, the combined credit and deduction could reduce your tax bill by almost $23,000.
For additional information you can visit the IRS web site at: www.irs.gov
Or contact your San Diego Health Insurance agent at (760) 795-2002. www.hwpinsurance.com