Section 45R of the Internal Revenue Code, which was added by the recently enacted Patient Protection and Affordable Care Act, offers a tax credit to certain small employers that provide health insurance coverage to their employees. It is effective for taxable years beginning in 2010. Both taxable and tax-exempt employers and employers may be eligible for the new tax credit.
The Internal Revenue Service (“IRS”) has issued Notice 2010-44 to provide guidance on the new tax credit. The Notice provides information, including helpful examples, on employer eligibility to take the tax credit, how to calculate and claim the tax credit, and transitional relief for qualifying for the tax credit in 2010.