In 2010, the Small Business Health Care Credit was made available to small business (those under 50 full-time equivalents*), to incentivize small businesses that offered health care to their employees.  This credit is also available for tax-exempt organizations, which is refundable.  If your nonprofit provides health benefits, contact us to determine how you can take advantage of the credit and receive a refund.

EXAMPLE of how it works:

Employer Paid Insurance Premiums         $50,000

Health Care Credit Calculation                       15%

(based upon wages and FTE)

Tax Savings                                                  $7500

If you’re a small business owner that didn’t owe tax in the current filing year, you could carry forward, or carry back the tax credit to other tax years.

Partial Credit: Phase-Out

The credit is phased out as the number of FTEs* increases from 10 to 25 and as average employee compensation increases from $25,000 to $50,000.

*There are exclusions and specific rules around the definition of FTE (Full time equivalents), for purposes of the Small Business Health Care Credit.  Contact us to determine if you qualify.