The Congressional Budget Office estimated the credit would cost $37 billion over 10 years and that taxpayers would claim up to $2 billion of Credit for Tax Year 2010. However, in a recent report by the US Treaury Inspector General, as of mid-May 2011, just more than 228,000 taxpayers had claimed the credit for a total amount of more than $278 million. An audit to determine whether the IRS adequately implemented and processed the credit found that while their efforts were mostly successful, some improvements are needed since the number of claims for health care tax credits has been much lower than anticipated.
“The Small Business Health Care Tax Credit is an important credit for both small business employers and their employees,” said TIGTA Inspector General J. Russell George in a statement. The IRS sent postcards to businesses that might potentially qualify for the credit to make sure they were aware of it, the IRS did not have ready access to data that would allow it to determine which of these businesses actually offered health insurance to their employees or otherwise qualified for the credit. He believes the report’s recommendations, once adopted, should improve the IRS’s ability to verify claims for this credit.”
Are you the owner of a small firm who is providing health insurance for your employees and paying at least 50% of the premium? Then you may qualify for the “Small Business Health Care Tax Credit”. We suggest you contact your accounting firm to make sure you are receiving the proper credit.
Effective 2010
Small business tax credit: Businesses with fewer than 25 employees and average wages of less than $50,000 could qualify for a tax credit of up to 35 percent of the cost of employees’ premiums
Contact us to learn more about the great small business benefit.
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