NEW – Small Business Tax Credit – Do You Qualify?
In general, the credit is available to small employers paying at least half the cost of single coverage for their employees.
How to Qualify? Generally, the tax credit is available to employers with fewer than 25 full-time equivalent (FTE) employees paying wages averaging less than $50,000 per employee per year.
However, since the eligibility formula is based in part on the number of FTEs, not the number of employees, many businesses will qualify even if they employ more than 25 individual workers.
How much is the Credit? The maximum credit is 35 percent of premiums paid in 2010 by eligible small business employers and 25 percent of premiums paid by eligible employers that are tax-exempt organizations. In 2014, this maximum credit increases to 50 percent of premiums paid by eligible small business employers and 35 percent of premiums paid by eligible employers that are tax-exempt organizations.
Do you qualify for the Maximum Credit? The maximum credit goes to smaller employers – those with 10 or fewer FTEs – paying annual average wages of $25,000 or less. How to claim the credit: Eligible small businesses can claim the credit as part of the general business credit starting with the 2010 income tax return they file in 2011. For tax-exempt employers, the IRS will provide further information on how to claim the credit. Your CPA will guide you in claiming your tax credit.