The new health reform law gives a tax credit to certain small employers that provide health care coverage to their employees, effective with tax years beginning in 2010. Over the next several weeks, Vision Payroll will be providing further information on the Small Business Health Care Tax Credit. Today’s topic is the Maximum Credit for Qualified Employers other than Tax-Exempt Employers.
For taxable years beginning in 2010 through 2013, the maximum credit is 35% of the Expenses Counted in Calculating the Health Care Credit. If an employer has eight employees who earn an average of $24,500 per year and the employer pays $90,000 in qualifying health care premiums, the maximum credit would be $90,000 X 35% = $31,500. This assumes that the qualifying health care premiums do not exceed the average premium for a small group market plan for the state or area of the state where the employer offers coverage.
The next topic to be covered in this series is the Maximum Credit for Tax-Exempt Qualified Employers. Contact Vision Payroll if you have further questions on the Maximum Credit for Qualified Employers other than Tax-Exempt Employers.