The Internal Revenue Service (IRS) Sept. 7 released a
draft version of the Form 8941 that businesses will use to calculate the small business health care tax credit when filing income taxes in 2011. The final version of the form will be available later this year.
The tax credit is designed to help small businesses afford health insurance coverage for their employees. The credit is worth up to 35 percent of a business’ premium costs in 2010, and the amount increases to 50 percent of premium costs in 2014.
In order to qualify for the credit, an employer must have fewer than 25 full-time equivalent employees (FTE) for the tax year; cover at least 50 percent of its employees’ premium costs; and offer average annual wages of less than $50,000 per FTE.
For more information, including scenarios illustrating how the credit applies in varying circumstances and how to determine which businesses are eligible for the tax credit, visit the
IRS website.
The IRS also offers a
step-by-step guide for calculating the credit and a list of
frequently asked questions.