Small Business Health Care Tax Credit Presentation Date (January 14, 2013)

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Small Business Health Care Tax Credit Presentation Date (January 14, 2013). What is the Small Business Health Care Tax Credit? Created in 2010 by the federal government to: Support small businesses that already offer health insurance Entice more companies to offer health insurance

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Small Business Health Care Tax Credit Presentation Date (January 14, 2013)

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Small Business Health Care Tax Credit

Presentation Date (January 14, 2013)

What is the Small Business Health Care Tax Credit?

Created in 2010 by the federal government to:

• Entice more companies to offer health insurance

For tax years 2010 through 2013, the maximum credit is:

• 35 percent of eligible contributions for small business employers
• 25 percent of eligible contributions for small tax-exempt employers

In 2014, the credit will increase to a maximum of:

• 50 percent for small business employers
• 35 percent for small tax-exempt employers

• Do I have fewer than 25 full-time equivalent (FTE) employees?
• Is the average wage of my employees less than\$50,000 per year?
• Do I pay at least 50% of my employee’s health insurance premiums?

If you can answer yes to these three questions, you’re well on your way.

Estimating the Credit’s Value

• As number of employees and/or average wage rises, the value of the credit is reduced. For example:
• 10 FTEs at average wage of \$25K equals a credit of 35%
• 10 FTEs at average wage of \$45K
• equals a credit of 7%
• 20 FTEs at average wage of \$25K equals a credit of 12%
• 20 FTEs at average wage of \$35K is phased out, so the credit equals 0%

How Do I Claim the Credit?