Most smaller businesses should be receiving a post card from the IRS in the next couple of weeks that tells you that your business may be eligible for a Health Care Tax Credit for the 2010 tax year.
What Are The Qualifying Parameters?
In short, your business will qualify for a 35% reimbursement (via a dollar for dollar tax reduction) of the premium your business pays for its group medical benefits if you meet all of the following conditions:
1. You have fewer than 25 Full Time Equivalents (FTE) working for you;
2. Your average wages are less than $50,000 per year per FTE; and
3. You pay at least 1/2 of the medical premium for Employee-Only coverage.
We’ve posted a Health Care Reform Tax Credit CALCULATOR on LinkenIn at http://www.LinkedIn.com/In/ChaseCarey . The calculator is pretty self explanatory and requires that you input just a few specific pieces of information in the YELLOW boxes. Your CFO/Finance Manager should be able to plug in estimates pretty easily. If not, please give us a call and we’ll help he or she out. By the way, the 35% tax credit is scheduled to increase to 50% by 2014.
Please consider that this is a BETA version of our calculator; it is based on IRS notices and other information available to date, not all of which is that detailed. But the calculator should be a good estimator. This calculator is programmed for GEORGIA for-profit businesses only. Businesses in each state are eligible for the Tax Credit as well as non-profits but they have different parameters and credit percentages. (It is interesting to note that the cost of health insurance in Georgia ranks 41 out of 50 states, meaning there are only 9 states that have lower health insurance costs).
Share with Your CFO/Finance Manger/Business Accountant
Please share our HCR Tax Credit Calculator with your CFO/Finance Manger and Business Accountant; we’d love to hear their feedback.
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