In IR-2010-096, the Internal Revenue Service (IRS) today announced the release of a draft version of new Form 8941, Credit for Small Employer Health Insurance Premiums. Vision Payroll has previously provided details on how employers become eligible for the Small Business Health Care Tax Credit (the Credit).
Small Businesses and Tax-Exempt Organizations Will Use Form 8941
Since Form 8941 is used to calculate the amount of the Credit, both taxable small businesses and tax-exempt organizations will use it. The Credit will then be carried to a tax return to be filed by the employer.
Entity Type Determines Reporting of Credit
Many small businesses will report the amount of the Credit on Form 3800, General Business Credit. Others may pass it through to other taxpayers such as partners, S corporation shareholders, trust beneficiaries, etc.
Tax-Exempt Organizations Will Use Form 990-T to Claim Credit
Tax-exempt organizations will claim the Credit on a revised Form 990-T, Exempt Organization Business Income Tax Return (and proxy tax under section 6033(e)). Tax-exempt organizations not otherwise required to file Form 990-T will be required to file it to claim the Credit.
Contact Vision Payroll if you have further questions on the Small Business Health Care Tax Credit.