IRS informs employers on new health care tax credit benefits
Posted: Monday, April 26, 2010 9:05 pm
The Internal Revenue Service began mailing postcards to more than four million small businesses and tax-exempt organizations, including nearly 72,000 in Tennessee, to make them aware of the benefits of the recently enacted small business health care tax credit.
Included in the Patient Protection and Affordable Care Act approved by Congress last month and signed into law by President Obama, the credit is one of the first health care reform provisions to go into effect.
The credit, which takes effect this year, is designed to encourage small employers to offer health insurance coverage for the first time or maintain coverage they already have.
In general, the credit is available to small employers that pay at least half the cost of single coverage for their employees in 2010.
The credit is specifically targeted to help small businesses and tax-exempt organizations that primarily employ low and moderate income workers.
The credit is completely phased out for employers that have 25 FTEs or more or that pay average wages of $50,000 per year or more.
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 organizations, the IRS will provide further information on how to claim the credit.
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