Employers can get a credit for providing health care coverage for your employees. However, it is not for everyone. In a BLR webinar titled "Tax Savings for Small Businesses: How to Maximize Valuable Deductions and Avoid IRS Overpayments," Brian C. Greenberg, CPA, outlined the details.
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Get Your Report Now!The full 35 percent credit is available for those employers who have 10 or fewer full-time employees and the average salary of the employees is $25,000 per year. If you meet these criteria, you will qualify for the full credit. There is a phase-out, however, for both criteria.
Does your business qualify? There are four pieces of info you will need to make that determination:
- Number of full-time employees in your firm [for those who you employ part-time, you must calculate what percentage (i.e., 30 hours per week would be .75 of a full-time employee];
- Number of employees participating in the health insurance plan;
- Annual employer premium contribution per participating employee (the employer must pay at least 50 percent of total insurance premium to qualify for the credit); and
- Average annual wage per employee (calculated by dividing the total gross wages by the total number of employees.)
Please exclude the owner and immediate family from ALL calculations. The owner and the immediate family do not count toward the calculation of this credit.
Brian C. Greenberg, CPA, is the founder of Brian C. Greenberg & Associates, LLC, a New Jersey-based tax accounting firm. (www.greenbergcpa.com) With 30 years of experience as an accountant, Greenberg has developed a diversified background to service his clients’ needs. Greenberg has extensive media experience both nationally and locally, commentating for the Wall Street Journal Report, Fox Business News, Bloomberg News, Forbes TV, and local TV in Philadelphia with ABC, NBC, and Fox. He has appeared as an analyst on the economy, stock market, taxes, budget issues, school issues, and more.
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