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Attention! Small Business Health Care Tax Credit For Employers!

By October 17, 2011June 8th, 2020Insurance

It is not too late to claim the Affordable Care Act’s Small Business Health Care Tax Credit. This is a tax credit from providing health insurance for your employees!


The filing for many small businesses has already passed, but qualifying employers that provided insurance in 2010 can still claim this significant assistance on 2010 tax returns. These qualifications include:

  • A qualifying employer must cover at least 50 percent of the cost of health care coverage for some of its workers based on the single rate.
  • A qualifying employer must have less than the equivalent of 25 full-time workers.
  • A qualifying employer must pay average annual wages below $50,000.
  • Both taxable (for profit) and tax-exempt firms qualify.

Here are our a few instructions on what forms to claim the credit:

  • Small businesses that have yet to file – for example, they took advantage of the automatic extension—can claim the credit on their 1040 series returns by today, Monday, October 17.
  • Small businesses that have already filed and want to claim the credit can amend their returns using Form 1120X for corporations or Form 1040X for others, including individual sole proprietors.
  • Eligible tax-exempt organizations can claim the credit on Form 990-T.
  • Small businesses without taxable income to offset should remember that the credit is part of the general business credit for Tax Year 2010, meaning they may not be eligible to carry back the credit for five years or forward for 20 years.

This credit is worth up to 35% of the health insurance premium costs that a small business incurred for insuring its employees in 2010 (25% for tax-exempt employers). On January 1, 2014, this rate will increase to 50 percent! Eligible small business that do not yet provide insurance can start doing so to claim the credit for 2011 forward.


Here’s a tip from the IRS

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