Tax Credit
The new health care reform law gives a tax credit to certain small employers that
provide health coverage to their employees, effective for tax years beginning in
2010.
To qualify for this tax credit:
- You must have less than 25 full-time equivalent employees for the tax year;
- You must have average annual wages of less than $50,000 per full-time equivalent
employee; and
- You must pay at least half of your employees’ health plan dues.
If you satisfy these requirements, you may be eligible for a tax credit of up to 35
percent of the amount you pay in dues. On Jan. 1, 2014, this rate will increase
to 50 percent.
Small tax-exempt organizations are also eligible for up to a 25 percent tax credit
in 2010, which will increase to 35 percent in 2014.
The tax credit may be claimed on the employer’s annual income tax return. For tax-exempt
employers, the IRS will provide information on how to claim the credit. Please consult
with your accountant or tax expert.
For your convenience, this calculator will help you estimate your potential health
plan savings under the new health care reform law. This calculator can help you
understand the potential financial impacts of health care reform on your business,
including:
- The small business health care tax credit (effective 2010).
- Requirements to provide health care coverage for employees (effective 2014).
- Penalties for not providing health care coverage (effective 2014).
- Implementation of excise taxes on high-cost health plans (effective 2018).
Disclaimer: This calculator is provided by H&R Block, which is not affiliated
with Blue Cross and Blue Shield or HMSA.
Learn more:
This information is based on HMSA’s review of the national health care reform
legislation. This overview is intended for educational purposes and should not be
used as tax, legal or compliance advice. Interpretations of the legislation vary
and some reform regulations differ for particular members enrolled in certain groups.
HMSA will continue to present and update information related to national health
care reform as additional guidance becomes available.
