How will the small-business health care tax credit make a difference for you?
For tax years 2010 through 2013, the maximum credit is 35 percent of premiums paid for small-business employers and 25 percent of premiums paid for small, tax-exempt employers.For tax years beginning in 2014, there will be changes to the credit:
* The maximum credit will increase to 50 percent of premiums paid for small-business employers and 35 percent of premiums paid for small, tax-exempt employers.
* To be eligible for the credit, a employer must pay premiums on behalf of employees enrolled in a qualified health plan offered through a Small Business Health Options Program Marketplace.
* The credit will be available to eligible employers for two consecutive taxable years. Even if you did not owe tax during the year, you can carry the credit back or forward to other tax years. Also, since the amount of the health insurance premium payments is more than the total credit, eligible small businesses can claim a business expense deduction for the premiums in excess of the credit.
There is good news for small, tax-exempt employers, too. The credit is refundable, so even if you have no taxable income, you may be eligible to receive the credit as a refund so long as it does not exceed your income tax withholding and Medicare tax liability.For more information on how to receive your tax credit, contact me at 214-7915 or visit www.ciiworld.com.
Paul Joseph Wittekind