Employers providing health care coverage to employees get credit
The Obamacare Tax Credit – The Patient Protection and Affordable Care Act (“Obamacare”) permits certain small businesses to claim a tax credit for providing health insurance to their employees. While there are many different options for claiming the Obamacare tax credit, the following is broad breakdown. The maximum credit is 35% (25% for charities) of the total cost paid to employee covered health care premiums and expands to 50% (35% for charities) in 2014. Small businesses may also still claim a deduction for premium expenses paid beyond the allowable tax credit. This tax credit is transferable between tax years and can even create a refund when no federal taxes are owed. To qualify, a small business: (1) must cover at least 50% of the cost of single (not family) health care coverage for all of its employees; (2) cannot have more than 25 full time employees; (3) and employees must have an average wage of less than $50,000. A business’ tax credit will vary, but generally, the smaller your business, the larger the tax credit. An amended tax return can even capture health care tax credit unclaimed in prior years. An experienced tax advisor can assist you in maximizing your tax savings, not just this tax year, but for past and future years. Contact us.