The IRS is taking steps to help small businesses claim tax credits under the new health reform regulations passed this year.
Form 8941, which was released in draft form on IRS.gov on Sept. 7, will help businesses calculate the small business health care tax credit they will include on their tax returns next year.
The small business health care tax credit, which was included in the Affordable Care Act signed by President Obama last March, is designed to encourage employers of small firms to offer health coverage to their employees and is effective this year.
"As the NGLCC continues to look at the impacts of health care reforms on small businesses, we appreciate the IRS's efforts to help small business owners claim their health care tax credits, and we encourage employers to utilize the resource," said Justin Nelson, co-founder and president of the NGLCC.
In 2010, the tax credit is available to eligible small businesses that contribute an amount equivalent to at least half the cost of individual coverage for their employees. In tax years 2010 to 2013, the maximum credit is 35 percent of premiums paid by eligible small business owners, and 25 percent of those paid by employers of tax-exempt organizations. In 2014, the maximum tax credit will increase to 50 percent for small business owners and to 35 percent for employers of tax-exempt organizations.
The IRS has also announced that tax-exempt organizations, which do not typically file income tax returns, will be able to claim their small business tax credit for the 2011 filing season on a revised Form 990-T. Currently used by tax-exempt organizations to report and pay tax on unrelated business income, Form 990-T will be revised for the 2011 filing season to enable these organizations to claim the new health care tax credit.
The final version of Form 8941 will be available later this year.
For more information about the small business health care tax credit, click here.
To determine if your small business is eligible to claim the small business health care tax credit, download this tool.
