The Treasury Inspector General for Tax Administration (TIGTA) has reported that few eligible small employers are claiming the health care tax credit, despite the IRS’ numerous public relations efforts.
Among the reasons given for the low take-up rate was that it took too long and it was too hard to claim the credit. Since there’s no sense in leaving money on the table, here’s what you need to know to successfully claim the credit.
Who qualifies. Employers that have fewer than 25 full-time equivalent employees (FTEs) and that pay at least 50% of employees’ health premiums can take the credit. Key: Employees’ contributions into cafeteria plans don’t count as employer-paid premiums for this purpose.
Through 2013, the maximum credit is 35%; beginning in 2014, the credit increases to 50% and will be available for two additional years. For nonprofit employers, the credit is 25% through 2013 and 35% beginning in 2014. The credit is...(register to read more)