Guest Contributor:Mark Crocker, Dixon Hughes Goodman, LLP, CPAs
The new health reform law gives a tax credit for certain small employers that provide healthcare coverage, effective beginning in 2010. Please review the following for eligibility and contact your tax advisor if you could benefit.
1) Tax Exempt Organizations (churches are considered 501(c)(3) exempt organizations) can qualify
2) Organizations must have fewer than 25 FTEs or FTE equivalents for the tax year and the average annual wages for such employees must be less than $50,000 per FTE
3) Once the average wages exceed $25,000 the health credit begins to be phased out
4) The employer must pay 50% or more of insurance premiums for the employees
5) For tax exempt organizations the maximum credit would be 25% of the total premiums paid subject to phase outs
6) The credit is calculated using Form 8941
7) The credit is claimed on the Form 990-T
For more details, visit the IRS website.
Mark S. Crocker is a partner with Dixon Hughes Goodman LLP, CPAs, serving nonprofit organizations throughout the Carolinas. You can email him at Mark.crocker@dhgllp.com
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IRS Compliance: Any tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties imposed under the Internal Revenue Code or applicable state or local tax law or (ii) promoting, marketing, or recommending to another party any transaction or matter addressed herein.
