Small Business Health Care Tax Credit

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  • oceanlovin'ea
    Senior Member
    • Jun 2005
    • 2682
    #1

    Small Business Health Care Tax Credit

    I just got the IRS Newswire about the Small Business Health Care Tax Credit. I read what it said but I am still not sure who is included in the Small Business.

    Can a single member S corporation qualify? Can a sole proprieteorship qualify?

    Would it only be if the business paid the health insurance for the employee and met the requirements for number of employees and amount of pay?

    Guess I need to do more research on this subject.

    Linda, EA
    Tags: None
    • BHoffman
      Senior Member
      • Feb 2008
      • 1768
      #2
      Originally posted by oceanlovin'ea
      I just got the IRS Newswire about the Small Business Health Care Tax Credit. I read what it said but I am still not sure who is included in the Small Business.

      Can a single member S corporation qualify? Can a sole proprieteorship qualify?

      Would it only be if the business paid the health insurance for the employee and met the requirements for number of employees and amount of pay?

      Guess I need to do more research on this subject.

      Linda, EA
      Hi Linda - I've prepared a few of these forms and will be happy to share what I know with you. The instructions for form 8941 are pretty straightforward. My Drake software has a very easy data entry screen to fill out.

      No owners/shareholders/proprietors qualify. Fewer than 25 FTE (full time equivalent) employees. Less than $50k average salary per employee. The credit only applies to the portion of health insurance benefits paid by the employer.

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        • Jiggers
          Senior Member
          • Sep 2005
          • 1973
          #3
          Originally posted by BHoffman
          Hi Linda - I've prepared a few of these forms and will be happy to share what I know with you. The instructions for form 8941 are pretty straightforward. My Drake software has a very easy data entry screen to fill out.
          Your clients must know what information is needed. My one client that wants to take this credit has given me information that she thinks is needed.

          However, it is not near complete.

          NCPE 1040 book has a great example and worksheet to work your way through the calculations. Especially when the employees didn't work the entire year.
          Jiggers, EA

            Comment

            • oceanlovin'ea
              Senior Member
              • Jun 2005
              • 2682
              #4
              Then none of my clients would qualify. I will read about it after tax season just so I know. I didn't want to miss something for one of my clients.

              Thanks

              Linda, EA

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