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Small businesses and tax-exempt organizations that primarily employ 25 or fewer workers with an average income of $50,000 or less may be able to claim the small business health care tax credit.
To be eligible for the credit, employers must pay at least half of the premiums for the health care insurance of their employees under a “qualifying arrangement.”
In Special Edition Tax Tip 2011-06, which was issued by the Internal Revenue Service on Sept. 30, the agency lays out several ways in which eligible small businesses can still use the credit for tax year 2010.
For instance, small businesses that have already filed for that year but later determine that they are eligible for the credit can file an amended 2010 tax return.
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% of the premiums paid.
For eligible tax-exempt employers, the maximum is 25% of the premiums.
Beginning in 2014, the maximum tax credit will go up to 50% of premiums paid by eligible small business employers and 35% for tax-exempt organizations.
Additional information on the eligibility requirements and calculating the credit can be found on the Small Business Health Care Tax Credit for Small Employers page at IRS.gov.
For further information, email Rob Dietz at NAHB, or call him at 800-368-5242 x8285.