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IRS Releases Draft Form for Small Businesses to Claim Healthcare Tax Credit

The Internal Revenue Service has released a draft version of the form that small businesses and tax-exempt organizations will use to calculate the small business...
September 8, 2010

The Internal Revenue Service has released a draft version of the form that small businesses and tax-exempt organizations will use to calculate the small business health care tax credit when they file income tax returns next year. The IRS also announced how eligible tax-exempt organizations - - which do not generally file income tax returns - - will claim the credit during the 2011 filing season.

The IRS has posted a draft of Form 8941 on IRS.gov. Both small businesses and tax-exempt organizations will use the form to calculate the credit. A small business will then include the amount of the credit as part of the general business credit on its income tax return.

The small business health care tax credit was included in the Affordable Care Act and is effective this year. The credit is designed to encourage small employers to offer health insurance coverage for the first time or maintain coverage they already have. For tax years 2010 to 2013, the maximum credit is 35 percent of premiums paid by eligible small business employers and 25 percent of premiums paid by eligible employers that are tax-exempt organizations. Beginning in 2014, the maximum tax credit will go up to 50 percent of premiums paid by eligible small business employers and 35 percent of premiums paid by eligible, tax-exempt organizations for two years.

Click here to read the IRS Small Business Healthcare Tax Credit (Insurance Journal 8/7/10)

Click here to access IRS Draft Form 8941

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